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How Anadarko’s Earnings and Revenue May Fare in 4Q17

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Anadarko’s revenue expectations

Anadarko Petroleum (APC) plans to release its 4Q17 and fiscal 2017 earnings on February 6, 2018, after the markets close. APC’s 4Q17 revenue estimate stands at ~$2.8 billion, whereas its 4Q16 revenue was ~$2.4 billion. In fiscal 2017, analysts expect APC to see revenue of $11.8 billion, compared with $7.9 billion in fiscal 2016.

As we can see above, Anadarko Petroleum’s revenue is expected to be higher in 4Q17 than in 4Q16, possibly due to higher crude oil prices. Crude oil prices (UCO) averaged ~$50.91 per barrel in 2017, compared with $43.41 in 2016. The rise was mostly and consistently seen in 4Q17. Analysts expect higher crude oil prices in 4Q17 to result in higher realized prices and higher revenue for Anadarko.

As shown in the image above, APC’s revenue has beaten analysts’ expectations in previous quarters. Investors will have to watch to see whether this trend continues in 4Q17.

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APC’s earnings estimates

APC’s EPS (earnings per share) are expected to be about -$0.06 in 4Q17, whereas it saw adjusted EPS of -$0.50 in 4Q16. In fiscal 2017, its EPS are expected to rise to -$2.20 from -$3.11 in fiscal 2016, due to higher anticipated revenue. The higher earnings could also be due to the expectation of APC’s 4Q17 and fiscal 2017 operating costs and expenses being lower than in 2016. Anadarko’s general and administrative expenses are expected to be $250 million (at the midpoint) in 4Q17 and $1.1 billion (at the midpoint) in fiscal 2017, compared with $324 million in 4Q16 and $1.4 billion in fiscal 2016.

Peer comparison

In contrast, peers Continental Resources (CLR), Whiting Petroleum (WLL), and Concho Resources (CXO) are expected to report earnings per share of $0.27, -$0.33, and $0.44, respectively, in 4Q17, compared with -$0.07, -$1.12, and $0.20 in 4Q16.

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