Yahoo Finance Can APA Put Together a Strong Q1 Earnings Performance?
APA Corporation APA is set to release first-quarter results on May 1. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 91 cents per share on revenues of $1.8 billion.
Let’s delve into the factors that might influence this upstream operator’s results in the March quarter. But it’s worth taking a look at APA’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last reported quarter, the independent oil and gas explorer missed the consensus mark on lower oil and natural gas prices, partly offset by strong production. APA had reported adjusted earnings per share of $1.15, below the Zacks Consensus Estimate of $1.38. Revenues of $1.9 billion generated by the firm also missed the Zacks Consensus Estimate by 7.5%.
APA has a trailing four-quarter earnings surprise of 14.2%, on average, having surpassed the Zacks Consensus Estimate on three occasions and missing on the other. This is depicted in the graph below:
APA Corporation Price and EPS Surprise
APA Corporation price-eps-surprise | APA Corporation Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line has been revised 1.1% downward in the past seven days. The estimated figure indicates a 23.5% fall year over year. Meanwhile, the Zacks Consensus Estimate for revenues suggests a 6.9% decrease from the year-ago period.
Factors to Consider
APA is expected to have benefited from higher domestic production during the first quarter. The company continues to churn out impressive volumes from its vast inventory of drill-ready locations in the Permian Basin — America's hottest and lowest-cost shale region. Consequently, our expectation for APA’s average first-quarter volume is pegged at 219,977 barrels of oil equivalent per day (BOE/d), up 9.1% from the year-ago level of 201,580 BOE/d.
However, as a counter to the aforementioned factor, the company’s lease operating expense in the first quarter might have gone up due to the prevailing inflationary situation. This, in turn, is likely to have affected overall earnings. In particular, our estimate for lease operating outgo is pegged at $360.2 million, indicating a 12.2% rise from $321 million reported in the year-ago quarter.
What Does Our Model Say?
The proven Zacks model does not conclusively show that APA is likely to beat estimates in the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -2.09%.
Zacks Rank: APA currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for APA, here are some firms from the energy space that you may want to consider on the basis of our model:
DT Midstream DTM has an Earnings ESP of +3.59% and a Zacks Rank #2 (Buy). The firm is scheduled to release earnings on Apr 30.
You can see the complete list of today’s Zacks #1 Rank stocks here.
DT Midstream beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 9.8%, on average. Valued at around $6.1 billion, DTM has gone up 35.3% in a year.
EOG Resources EOG has an Earnings ESP of +0.90% and a Zacks Rank #2. The firm is scheduled to release earnings on May 2.
The 2024 Zacks Consensus Estimate for EOG Resources indicates 5.1% year-over-year earnings per share growth. Valued at around $78 billion, EOG has gained 15.6% in a year.
MPLX LP MPLX has an Earnings ESP of +3.78% and a Zacks Rank #3. The firm is scheduled to release earnings on Apr 30.
The 2024 Zacks Consensus Estimate for MPLX indicates 8.2% year-over-year earnings per unit growth. It has a trailing four-quarter earnings surprise of 7.3%, on average. Valued at around $41.6 billion, MPLX has gained 20.3% in a year.
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APA Corporation (APA) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
MPLX LP (MPLX) : Free Stock Analysis Report
DT Midstream, Inc. (DTM) : Free Stock Analysis Report
