Apache Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Apache (NYSE:APA) will unveil its latest earnings on Thursday, 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.

Apache Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of $2.27 per share, a decline of 23.1% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $2.36. Between one and three months ago, the average estimate moved down. It has been unchanged at $2.27 during the last month. Analysts are projecting profit to rise by 16.8% versus last year to $9.93.

Past Earnings Performance: The company is hoping to beat estimates after missing the mark for two straight quarters. Last quarter, it reported net income of $2.07 per share against an estimate of profit of $2.52 per share. The quarter before that, it missed forecasts by 9 cents.

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A Look Back: In the second quarter, profit fell 71.7% to $356 million (86 cents a share) from $1.26 billion ($3.17 a share) the year earlier, missing analyst expectations. Revenue fell 8.4% to $3.97 billion from $4.34 billion.

Wall St. Revenue Expectations: Analysts predict a decline of 6% in revenue from the year-earlier quarter to $4.07 billion.

Stock Price Performance: Between September 28, 2012 and October 26, 2012, the stock price dropped $4.11 (-4.8%), from $86.47 to $82.36. The stock price saw one of its best stretches over the last year between January 26, 2012 and February 9, 2012, when shares rose for 11 straight days, increasing 9% (+$8.77) over that span. It saw one of its worst periods between September 14, 2012 and September 26, 2012 when shares fell for nine straight days, dropping 7.8% (-$7.24) over that span.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 43.7% in the third quarter of the last fiscal year, 25.1% in the fourth quarter of the last fiscal year and 15.6%in the first quarter before dropping in the second quarter.

An income boost this time around would be welcome news after profit declines in the past two quarters. Net income dropped 29.7% in the first quarter and then again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.91 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company regressed in this liquidity measure from 1.05 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 9% to $5.12 billion while assets decreased 6.4% to $4.64 billion.

Analyst Ratings: With 19 analysts rating the stock a buy, none rating it a sell and four rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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