Apache (NYSE:APA) is scheduled to release its 1st quarter 2013 earnings on Thursday, May 9th at 8:00pm ET. Below I have provided an update of the quarter as well as an overview of earnings expectations.
Profile and Estimates
Apache has a market cap of $29.48 billion and currently trades for $75.24 per share. Shares are down 3.69% YTD and trade 20.15% below their 52-week high of $94.22. Analysts have a mean target price of $98.38 and a median price target of $95.00 on the shares. Twenty six analysts have an average first quarter earnings per share estimate of $2.21 on estimated revenues of $4.31 billion. Apache has missed estimated EPS targets in all of the previous four quarters.
Fundamentals and Highlights (Sources cited below article)
- Conservative balance sheet, D/E of 0.4 is below the industry averages 0.5.
- P/B of 1.0 and P/S of 1.7 are both below the industry averages 1.8 and 2.8 respectively.
- Well balanced portfolio (oil and gas - check, offshore and onshore - check, domestic and international - check).
- Recently raised dividend to $0.20 per share from $0.18, current trailing yield is 0.94%.
- High reliance on cashflows (approximately 30% of total) from unstable Egyptian assets.
- Net margins of 11.3%, ROA of 3.4 and ROE of 6.7 are all below the industry averages 13.1%, 3.9 and 8.7 respectively.
- Free cash flow has been trending lower, was negative $1.027 billion last year.
- Susceptible to uncontrollable drops in oil and gas prices.
- Assets have doubled in the last four years which is good in that they should help Apache generate more income but, they could take a long time to develop.
Short interest for Apache has been fairly level over the past six months but has on average been close to 25% higher than the prior six month period. This indicates investors are fairly comfortable with the valuation but I feel shares are going to be more volatile in the short term than when compared to competitors like Marathon Oil who have much lower expectations (per price targets and current valuation). Investors should feel comfortable with the stock based on its profitable acquisition history which will hopefully translate into higher returns on its recently acquired assets. Keep an eye out for the earnings release on Thursday!
In addition to the links above, ratios and financial data was sourced from Morningstar.com, which you can find here.
Other company data was sourced from the annual report that can be accessed here.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.