What To Expect From Anadarko’s Second Quarter Results

by Trefis Team
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Anadarko Petroleum (NYSE: APC) will release its second-quarter results on 31st July 2018 and conduct a conference call with analysts the following day. Consensus market estimates expect the company to post an EPS (Non-GAAP) of $0.56 vis-à-vis a net loss of $0.77 reported a year ago. Revenue is also anticipated to display a notable growth rate of ~11% and is expected to be reported at $3.02 billion. The company’s significant year-over-year (y-o-y) performance improvement is most likely to be driven by higher commodity prices and an increased proportionate share of liquid output.

Anadarko’s production volume may remain weak in the second quarter and is expected to be comparatively stronger in the second half of the year. The company expects its second-quarter total sales volume to range from 615-640 thousand barrels of oil equivalent per day (MBOED) in comparison to a sales volume of 631 MBOED achieved a year ago. However, the company’s full-year outlook remains strong at 658-685 MBOED, almost 7% higher than the expected second quarter volumes and relatively flat y-o-y. Despite weaker volumes, the company’s revenue and margin are expected to benefit from a greater mix of liquid assets in its total portfolio. The company has strategically been increasing its exposure to liquid assets in order to benefit from higher crude oil prices and focus on its richer oil properties. In its first quarter, the company enhanced its liquid composition to 73% compared to 61% reported a year ago. This enhanced exposure is likely to continue and benefit Anadarko in the second quarter as well.

Additionally, Anadarko’s revenue is likely to be enhanced by higher crude oil prices in the second quarter. WTI crude oil prices averaged at approximately $68.06 per barrel in Q2 ’18, in comparison to a price of $48.18 per barrel a year ago. Crude oil prices were helped by the sustained production cuts and the continued uncertainty with respect to Iran’s oil operations.

The company continues to remain focused on increasing shareholder value through its sustained commitment of increasing dividends and share repurchases. Overall we expect the company to have a moderate quarter sequentially but deliver substantial improvement y-o-y. Our expectation for Anadarko’s full-year 2018 results has been outlined in our interactive dashboard: Q2 ’18: What To Expect From Anadarko Petroleum In 2018. In case you have a different outlook, you can make changes to our assumed figures and arrive at your own fair price estimate for the company.

 

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