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APA (APA) Up 1.9% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for APA (APA - Free Report) . Shares have added about 1.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is APA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
APA Q1 Earnings Miss, Sales Beat
APA reported first-quarter 2024 adjusted earnings of 78 cents per share, missing the Zacks Consensus Estimate of 90 cents and declining from the year-ago adjusted figure of $1.19. The underperformance primarily reflects lower production.
Revenues of $1.9 billion were down 6.3% from the year-ago quarter’s sales but came ahead of the Zacks Consensus Estimate by 1.6% due to higher-than-expected commodity price realizations.
Meanwhile, APA continues to reward shareholders with dividends and buybacks. APA bought back 3 million shares at $33.27 apiece during the first quarter. The company also shelled out $76 million in dividend payment.
Production & Selling Prices
Production of oil and natural gas averaged 389,157 BOE/d, which comprises 66% liquids. The figure was down 1.3% from the year-ago quarter and below our expectation of 397,312 BOE/d.
U.S. output (accounting for 55% of the total) rose 6.2% year over year to 214,050 BOE/d but production from the company’s international operations decreased 9.1% to 175,107 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 258,062 barrels per day (Bbl/d). Natural gas output totaled 786,569 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the first quarter was $80.65 per barrel, up 2.9% from the year-ago realization of $78.37. The number also came above our projection of $74.99. Meanwhile, the average realized natural gas price fell to $2.47 per thousand cubic feet (Mcf) from $3.22 in the year-ago period but beat our estimates of $2.27.
Costs & Financial Position
APA’s first-quarter lease operating expenses totaled $338 million, up 5.3% from $321 million in the year-ago period. Moreover, a significant increase in the cost of oil/gas equipment and higher depreciation outgo meant that total operating expenses rose 19.3% from the corresponding period of 2023 to $1.5 billion. Our model put the figure at $1.4 billion.
During the quarter under review, APA generated $368 million of cash from operating activities while it incurred $568 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $827 million. It also registered a free cash flow of $99 million, though it plunged from $272 million a year ago.
As of Mar 31, APA had approximately $102 million in cash and cash equivalents and $5.2 billion in long-term debt. The debt-to-capitalization ratio of the company was 66.5.
Guidance
APA expects adjusted production to average 399,000-401,000 BOE/d in Q2 and 392,000-394,000 BOE/d in 2024. Of this, oil volumes are likely to be 203,000 Bbl/d during the April-June period and 198,000 Bbl/d for the full year. The company pegged its upstream capital expenditure for the year at $2.7 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.7% due to these changes.
VGM Scores
At this time, APA has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, APA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
APA belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, EQT Corporation (EQT - Free Report) , has gained 4.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
EQT reported revenues of $1.72 billion in the last reported quarter, representing a year-over-year change of -8.9%. EPS of $0.82 for the same period compares with $1.70 a year ago.
EQT is expected to post a loss of $0.08 per share for the current quarter, representing a year-over-year change of +52.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -91.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for EQT. Also, the stock has a VGM Score of D.
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APA (APA) Up 1.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for APA (APA - Free Report) . Shares have added about 1.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is APA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
APA Q1 Earnings Miss, Sales Beat
APA reported first-quarter 2024 adjusted earnings of 78 cents per share, missing the Zacks Consensus Estimate of 90 cents and declining from the year-ago adjusted figure of $1.19. The underperformance primarily reflects lower production.
Revenues of $1.9 billion were down 6.3% from the year-ago quarter’s sales but came ahead of the Zacks Consensus Estimate by 1.6% due to higher-than-expected commodity price realizations.
Meanwhile, APA continues to reward shareholders with dividends and buybacks. APA bought back 3 million shares at $33.27 apiece during the first quarter. The company also shelled out $76 million in dividend payment.
Production & Selling Prices
Production of oil and natural gas averaged 389,157 BOE/d, which comprises 66% liquids. The figure was down 1.3% from the year-ago quarter and below our expectation of 397,312 BOE/d.
U.S. output (accounting for 55% of the total) rose 6.2% year over year to 214,050 BOE/d but production from the company’s international operations decreased 9.1% to 175,107 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 258,062 barrels per day (Bbl/d). Natural gas output totaled 786,569 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the first quarter was $80.65 per barrel, up 2.9% from the year-ago realization of $78.37. The number also came above our projection of $74.99. Meanwhile, the average realized natural gas price fell to $2.47 per thousand cubic feet (Mcf) from $3.22 in the year-ago period but beat our estimates of $2.27.
Costs & Financial Position
APA’s first-quarter lease operating expenses totaled $338 million, up 5.3% from $321 million in the year-ago period. Moreover, a significant increase in the cost of oil/gas equipment and higher depreciation outgo meant that total operating expenses rose 19.3% from the corresponding period of 2023 to $1.5 billion. Our model put the figure at $1.4 billion.
During the quarter under review, APA generated $368 million of cash from operating activities while it incurred $568 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $827 million. It also registered a free cash flow of $99 million, though it plunged from $272 million a year ago.
As of Mar 31, APA had approximately $102 million in cash and cash equivalents and $5.2 billion in long-term debt. The debt-to-capitalization ratio of the company was 66.5.
Guidance
APA expects adjusted production to average 399,000-401,000 BOE/d in Q2 and 392,000-394,000 BOE/d in 2024. Of this, oil volumes are likely to be 203,000 Bbl/d during the April-June period and 198,000 Bbl/d for the full year. The company pegged its upstream capital expenditure for the year at $2.7 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.7% due to these changes.
VGM Scores
At this time, APA has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, APA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
APA belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, EQT Corporation (EQT - Free Report) , has gained 4.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
EQT reported revenues of $1.72 billion in the last reported quarter, representing a year-over-year change of -8.9%. EPS of $0.82 for the same period compares with $1.70 a year ago.
EQT is expected to post a loss of $0.08 per share for the current quarter, representing a year-over-year change of +52.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -91.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for EQT. Also, the stock has a VGM Score of D.