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Can APA Maintain Its Impressive Beat Streak in Q4 Earnings?

APA Corporation APA is set to release fourth-quarter results on Feb 21. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.38 per share on revenues of $2.1 billion.

Let’s delve into the factors that might influence this upstream operator’s results in the December quarter. But it’s worth taking a look at APA’s previous-quarter performance first.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, the independent oil and gas explorer beat the consensus mark on strong production. APA had reported adjusted earnings per share of $1.33, above the Zacks Consensus Estimate of $1.08. Revenues of $2.3 billion generated by the firm also beat the Zacks Consensus Estimate by 15.7%.

APA has a trailing four-quarter earnings surprise of 4%, on average, having surpassed the Zacks Consensus Estimate on each occasion. This is depicted in the graph below:

Trend in Estimate Revision

The Zacks Consensus Estimate for the fourth-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 6.8% deterioration year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 14.1% decrease from the year-ago period.

Factors to Consider

APA  is expected to have benefited from higher domestic production during the fourth 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 fourth-quarter volume is pegged at 223,996 barrels of oil equivalent per day (BOE/d), up 2.8% from the year-ago quarter’s level of 217,830 BOE/d.

On a further bullish note, the company’s lease operating expense in the fourth quarter might have come down due to prudent management. This, in turn, is likely to have buoyed overall earnings. In particular, our estimate for lease operating outgo is pegged at $374.9 million, indicating a 0.6% drop from the $377 million reported in the year-ago quarter.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for APA Corporation this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

APA has an Earnings ESP of +0.34% and a Zacks Rank #3.

Other Stocks to Consider

APA Corporation is not the only company in the energy space looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:

Cheniere Energy LNG has an Earnings ESP of +5.55% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Cheniere Energy 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 92%, on average. Valued at around $37.5 billion, LNG has gained 4.6% in a year.

Suncor Energy SU has an Earnings ESP of +0.64% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 21.

Suncor Energy beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 15.7%, on average. Valued at around $40.8 billion, SU has lost 7.1% in a year.

Diamondback Energy FANG has an Earnings ESP of +0.18% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 20.

The 2024 Zacks Consensus Estimate for Diamondback Energy indicates 1.4% year-over-year earnings per share growth. Valued at around $30.4 billion, FANG has gained 32.6% in a year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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