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Anadarko Petroleum (APC) Down 1.7% Since Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Anadarko Petroleum CorporationAPC . Shares have lost about 1.7% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is APC 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.

Anadarko Tops Q4 Earnings Estimates, Issues Guidance

Anadarko Petroleum Corporation reported fourth-quarter 2017 earnings of 18 cents per share, beating the Zacks Consensus Estimate of 3 cents by a whopping 500%. In the year-ago quarter, the company had incurred a loss of 50 cents.

On a GAAP basis, Anadarko Petroleum's earnings were $1.80 per share, rebounding from the prior-year quarter loss of 94 cents.

Total Revenues

In the reported quarter, Anadarko Petroleum's revenues of $2,929 million surpassed the Zacks Consensus Estimate of $2,713 million by 7.9%. Revenues were also up 22.7% year over year.

The year-over-year improvement was due to higher oil sales revenues, which increased 30.6%.

Operational Highlights

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

In the quarter, the company's average daily sales volume was 637,000 BOE per day (BOE/d). U.S. Onshore assets delivered sales volumes of 391,000 BOE/d on a divestiture-adjusted basis, an increase of 9% from the prior-year quarter.

The company's total costs and expenses in fourth quarter dropped 13.5% year over year to $2,591 million, primarily due to lower exploration and Oil and gas transportation expenses.

Interest expenses came in at $252 million, increasing 8.1% from $233 million a year ago.

Shareholder Friendly Initiatives

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

The board of directors authorized a $500-million increase to the company's previously announced $2.5 billion share repurchase program, bringing the total program to $3.0 billion. As of Feb 5, 2018, the company bought back 30 million shares using $1.6 billion from the repurchase program.

Financial Condition

Anadarko Petroleum had cash and cash equivalents of $4,553 million as of Dec 31, 2017, up substantially from $3,184 million as of Dec 31, 2016.

Long-term debt as of Dec 31, 2017 were $15,547 million, reflecting an increase from $15,281 million as of Dec 31, 2016.

Its net cash flow from operating activities during the quarter was $1,390 million compared with $1,123 million generated in the year-ago quarter.

Guidance

Anadarko Petroleum expects average daily oil sales volume in the range of 370,000-390,000 BOE for 2018.

The company projects its total 2018 sales volume in the range of 238-248 million BOE.

It expects 2018 capital expenditure in the range of $4,100-$4,500 million.

How Have Estimates Been Moving Since Then?

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

Anadarko Petroleum Corporation Price and Consensus

Anadarko Petroleum Corporation Price and Consensus | Anadarko Petroleum Corporation Quote

VGM Scores

At this time, APC has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is equally suitable for growth and momentum investors while value investors may want to look elsewhere.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. Notably, APC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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