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Why Is APA (APA) Down 5.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for APA (APA - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is APA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
APA Q2 Earnings, Sales Beat
APA reported second-quarter 2024 adjusted earnings of $1.17 cents per share, beating the Zacks Consensus Estimate of 95 cents and improving from the year-ago adjusted figure of 85 cents. The outperformance primarily reflects higher-than-expected production owing to the contribution from the Callon Petroleum acquisition that was closed on Apr 1.
Revenues of $2.8 billion were up 42.4% from the year-ago quarter’s sales and came ahead of the Zacks Consensus Estimate by 20.7%.
Meanwhile, APA continues to reward shareholders with dividends and buybacks. APA bought back 1.5 million shares at $28.72 apiece during the second quarter. The company also shelled out $92 million in dividend payments.
Production & Selling Prices
Production of oil and natural gas averaged 473,409 BOE/d, which comprises 71% liquids. The figure was up 18.7% from the year-ago quarter and surpassed our expectation of 450,182 BOE/d.
U.S. output (accounting for 64% of the total) jumped 42.5% year over year to 303,416 BOE/d but production from the company’s international operations decreased 8.7% to 169,993 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 334,136 barrels per day (Bbl/d). Natural gas output totaled 835,639 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the second quarter was $82.28 per barrel, up 7.7% from the year-ago realization of $76.38. The number also came above our projection of $77.21. Meanwhile, the average realized natural gas price fell to $1.77 per thousand cubic feet (Mcf) from $2.39 in the year-ago period and missed our estimate of $2.06.
Costs & Financial Position
APA’s second-quarter lease operating expenses totaled $460 million, up 27.4% from $361 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 47.8% from the corresponding period of 2023 to $1.9 billion. Our model put the figure at $2 billion.
During the quarter under review, APA generated $877 million of cash from operating activities while it incurred $839 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $1.1 billion. It also registered a free cash flow of $103 million compared to $94 million a year ago.
As of Jun 30, APA had approximately $160 million in cash and cash equivalents and $6.7 billion in long-term debt.
Guidance
APA expects adjusted production to average 388,000 BOE/d in Q3 and 387000 BOE/d in 2024. Of this, oil volumes are likely to be 208,000 Bbl/d during the July-September period and 199,000 Bbl/d for the full year. The company pegged its upstream capital expenditure for the year at $2.7 billion or more.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted -6.49% due to these changes.
VGM Scores
Currently, APA has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward 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 is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, CNX Resources Corporation. (CNX - Free Report) , a stock from the same industry, has gained 6.5%. The company reported its results for the quarter ended June 2024 more than a month ago.
CNX Resources reported revenues of $346 million in the last reported quarter, representing a year-over-year change of +2.7%. EPS of $0.36 for the same period compares with $0.29 a year ago.
CNX Resources is expected to post earnings of $0.30 per share for the current quarter, representing a year-over-year change of -14.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +11.9%.
CNX Resources has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is APA (APA) Down 5.6% Since Last Earnings Report?
It has been about a month since the last earnings report for APA (APA - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is APA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
APA Q2 Earnings, Sales Beat
APA reported second-quarter 2024 adjusted earnings of $1.17 cents per share, beating the Zacks Consensus Estimate of 95 cents and improving from the year-ago adjusted figure of 85 cents. The outperformance primarily reflects higher-than-expected production owing to the contribution from the Callon Petroleum acquisition that was closed on Apr 1.
Revenues of $2.8 billion were up 42.4% from the year-ago quarter’s sales and came ahead of the Zacks Consensus Estimate by 20.7%.
Meanwhile, APA continues to reward shareholders with dividends and buybacks. APA bought back 1.5 million shares at $28.72 apiece during the second quarter. The company also shelled out $92 million in dividend payments.
Production & Selling Prices
Production of oil and natural gas averaged 473,409 BOE/d, which comprises 71% liquids. The figure was up 18.7% from the year-ago quarter and surpassed our expectation of 450,182 BOE/d.
U.S. output (accounting for 64% of the total) jumped 42.5% year over year to 303,416 BOE/d but production from the company’s international operations decreased 8.7% to 169,993 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 334,136 barrels per day (Bbl/d). Natural gas output totaled 835,639 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the second quarter was $82.28 per barrel, up 7.7% from the year-ago realization of $76.38. The number also came above our projection of $77.21. Meanwhile, the average realized natural gas price fell to $1.77 per thousand cubic feet (Mcf) from $2.39 in the year-ago period and missed our estimate of $2.06.
Costs & Financial Position
APA’s second-quarter lease operating expenses totaled $460 million, up 27.4% from $361 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 47.8% from the corresponding period of 2023 to $1.9 billion. Our model put the figure at $2 billion.
During the quarter under review, APA generated $877 million of cash from operating activities while it incurred $839 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $1.1 billion. It also registered a free cash flow of $103 million compared to $94 million a year ago.
As of Jun 30, APA had approximately $160 million in cash and cash equivalents and $6.7 billion in long-term debt.
Guidance
APA expects adjusted production to average 388,000 BOE/d in Q3 and 387000 BOE/d in 2024. Of this, oil volumes are likely to be 208,000 Bbl/d during the July-September period and 199,000 Bbl/d for the full year. The company pegged its upstream capital expenditure for the year at $2.7 billion or more.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted -6.49% due to these changes.
VGM Scores
Currently, APA has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward 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 is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, CNX Resources Corporation. (CNX - Free Report) , a stock from the same industry, has gained 6.5%. The company reported its results for the quarter ended June 2024 more than a month ago.
CNX Resources reported revenues of $346 million in the last reported quarter, representing a year-over-year change of +2.7%. EPS of $0.36 for the same period compares with $0.29 a year ago.
CNX Resources is expected to post earnings of $0.30 per share for the current quarter, representing a year-over-year change of -14.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +11.9%.
CNX Resources has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.