Anadarko Petroleum (APC) Shares Down 1.7% Since Earnings Report: Is a Rebound Possible?

It’s been a month since the last earnings report Anadarko Oil Corporation APC. Shares have lost about 1.7% in the period.

Will the recent negative trend continue into its next earnings release, or is APC poised for a breakout? Before we dive into how investors and analysts have reacted recently, let’s take a quick look at the latest earnings report to better understand the important catalysts.

Anadarko beats Q4 earnings estimates, releases outlook

Anadarko Petroleum Corporation reported fourth-quarter 2017 earnings of 18 cents per share, more than 500% ahead of the Zacks consensus estimate of 3 cents. In the same quarter a year earlier, the company reported a loss of 50 cents.

Anadarko Petroleum reported GAAP earnings of $1.80 per share, rebounding from a loss of 94 cents in the same quarter last year.

Total revenue

For the reported quarter, Anadarko Petroleum’s revenues of $2,929 million surpassed the Zacks Consensus Estimate of $2,713 million by 7.9%. Revenues also increased 22.7% year-over-year.

The year-on-year improvement was driven by an increase in revenues from crude oil sales, which increased by 30.6%.

Operational Highlights

In 2017, Anadarko Petroleum organically increased proved reserves by 244 million barrels of oil equivalent (BOE) before the effects of price revisions.

The company’s average daily sales for the quarter were 637,000 BOE/d. ​​The US Onshore assets delivered sales volume of 391,000 BOE/d after divestments, up 9% from the prior-year quarter.

The company’s total costs and expenses decreased 13.5% year over year in the fourth quarter to $2,591 million, primarily due to lower oil and gas exploration and transportation spending.

Interest expense was $252 million, an increase of 8.1% compared with $233 million a year earlier.

Shareholder-friendly initiatives

Anadarko Petroleum raised its quarterly dividend from 5 cents to 25 cents, a 400% increase.

The Board of Directors approved an increase of $500 million to the Company’s previously announced $2.5 billion share repurchase program, bringing the total program to $3.0 billion. As of February 5, 2018, the Company had repurchased 30 million shares, using $1.6 billion of the repurchase program.

Financial condition

As of December 31, 2017, Anadarko Petroleum had cash and cash equivalents of $4,553 million, a significant increase from $3,184 million at December 31, 2016.

Long-term debt at December 31, 2017 amounted to USD 15,547 million, an increase from USD 15,281 million at December 31, 2016.

Net cash provided by operating activities in the quarter was $1,390 million, compared to $1,123 million generated in the same quarter a year earlier.

Conductivity

Anadarko Petroleum forecasts average daily crude oil sales in 2018 to be 370,000-390,000 barrels of oil equivalent.

The company forecasts total sales in 2018 of 238-248 million barrels of oil equivalent.

Capital expenditure in 2018 is expected to range from USD 4,100 to USD 4,500 million.

How have estimates changed since then?

Last month, investors witnessed an upward trend in new estimates. There have been six upward revisions in the current quarter. In the past month, the consensus estimate has shifted 815.3% due to these revisions.

Anadarko Petroleum Corporation Price and Consensus

Anadarko Petroleum Corporation Price and Consensus | Anadarko Petroleum Corporation Quote

VGM Results

At the moment, APC has a strong Growth Score of A, a grade with the same rating on the momentum front. However, the stock has been given a grade of C on the value side, which puts it in the middle 20% for this investment strategy.

Overall, the stock has a composite VGM Score of A. If you’re not focused on a single strategy, this rating should interest you.

Based on our ratings, these stocks are equally suitable for growth and momentum investors, but value investors may want to look elsewhere.

Perspectives

The stock’s estimates are trending higher, and the magnitude of these revisions looks promising. Interestingly, APC has a Zacks Rank #3 (Hold). We expect the stock to turn around in line in the next few months.

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