Anadarko Petroleum’s 1Q18 Earnings: Must-Knows



Anadarko’s 1Q18 revenue

Anadarko Petroleum (APC) reported its 1Q18 earnings on May 1 after markets closed. The company reported revenue of ~$3.04 billion, compared with the analyst estimate of ~$2.95 billion. In 1Q17, APC had reported revenue of ~$3.8 billion.

Higher oil sales in 1Q18 ($2.12 billion versus $1.66 billion in 1Q17) were offset by lower natural gas sales ($247 million versus $502 million in 1Q17), lower gathering, processing, and marketing sales ($360 million in 1Q18 versus $444 million in 1Q17), and lower gains on divestitures ($19 million in 1Q18 versus $869 million in 1Q17). Oil sales in 4Q17 were $1.9 billion, and losses on divestitures in 4Q17 were $113 million.

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Anadarko’s 1Q18 earnings

Anadarko Petroleum reported adjusted earnings per share (or EPS ) of  $0.52 in 1Q18, compared with the estimated EPS of $0.36. APC’s EPS in 1Q17 were -$0.60. In 4Q17, the company reported adjusted earnings per share of $0.18.

Earnings were higher on a year-over-year basis despite lower year-over-year revenues because of lower operating expenses, which were ~$2.5 billion in 1Q18, versus ~$3.9 billion in 1Q17 and ~$2.6 billion in 4Q17.

Key 1Q18 highlights and management commentary

The company noted that it increased its oil production mix to 57% (versus 53% in 4Q17) and generated its highest per-barrel margins since 2014 (when oil prices averaged more than $93 per barrel for WTI, compared to $58.4 per barrel in 1Q18).

The company also entered into an accelerated share repurchase program to complete its expanded $3.0 billion share buyback program by the end of 2Q17 and said that it will “consider expanding this program further should free cash flow from the current operating environment continue to increase.”


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