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Apache's Third Quarter Earnings Report
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Apache (NYSE:APA) announced its results for the most recent quarter on November 1, 2012. Apache is an energy company that explores for, develops, and produces natural gas, crude oil, and natural gas liquids in six countries.
Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Surprising Earnings Results
The Numbers: Apache fell short of estimates with adjusted net income of $2.16 per share and revenues of $4.18 billion. Analysts were expecting adjusted net income of $2.27 per share and revenues of $4.51 billion. Revenue fell 3.4% from the same period last year. Revenue declined last quarter after shrinking 8.4% to $3.97 billion in the second quarter. Apache's net income for the third quarter fell 82% from last year's figures to $180 million. Last quarter marks the third in a row in which the company's net income has fallen. Profits declined 71.7% in the second quarter and 29.7% in the first quarter.
Management Quote: "We are continuing to add drilling rigs and accelerate activity in the Permian and Anadarko basins. Today, we are running 56 rigs in these regions with plans to expand throughout next year. All are drilling oil and liquids-rich targets and more than half are drilling horizontal wells. Production in these two regions increased 30 percent from a year ago, accounting for nearly a quarter of Apache's overall production compared with less than a fifth in third-quarter 2011. We expect this growth trajectory to continue well into the future," said G. Steven Farris, chairman and chief executive officer.
A Look Back: Net income has dropped 16.4% year-over-year on average across the last five quarters. Performance was hurt by an 82% decline in the most recent quarter from the year-earlier quarter.
Looking Ahead: Next quarter's results are expected to be more favorable for the company. Over the past 60 days, the average estimate for the fourth quarter has reached $2.45 per share, up from $2.36. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. At $9.93 per share, the average estimate for the fiscal year has fallen from $10.49 90 days ago.
Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Surprising Earnings Results
The Numbers: Apache fell short of estimates with adjusted net income of $2.16 per share and revenues of $4.18 billion. Analysts were expecting adjusted net income of $2.27 per share and revenues of $4.51 billion. Revenue fell 3.4% from the same period last year. Revenue declined last quarter after shrinking 8.4% to $3.97 billion in the second quarter. Apache's net income for the third quarter fell 82% from last year's figures to $180 million. Last quarter marks the third in a row in which the company's net income has fallen. Profits declined 71.7% in the second quarter and 29.7% in the first quarter.
Management Quote: "We are continuing to add drilling rigs and accelerate activity in the Permian and Anadarko basins. Today, we are running 56 rigs in these regions with plans to expand throughout next year. All are drilling oil and liquids-rich targets and more than half are drilling horizontal wells. Production in these two regions increased 30 percent from a year ago, accounting for nearly a quarter of Apache's overall production compared with less than a fifth in third-quarter 2011. We expect this growth trajectory to continue well into the future," said G. Steven Farris, chairman and chief executive officer.
A Look Back: Net income has dropped 16.4% year-over-year on average across the last five quarters. Performance was hurt by an 82% decline in the most recent quarter from the year-earlier quarter.
Looking Ahead: Next quarter's results are expected to be more favorable for the company. Over the past 60 days, the average estimate for the fourth quarter has reached $2.45 per share, up from $2.36. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. At $9.93 per share, the average estimate for the fiscal year has fallen from $10.49 90 days ago.
by
Investopedia Staff
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