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Anadarko’s Earnings Were 38% Lower than Analysts’ Estimate

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Feb. 6 2019, Published 9:33 a.m. ET

Anadarko’s fourth-quarter earnings

On February 5, Anadarko Petroleum (APC) reported an adjusted net income of $0.38 per diluted share, ~38% below analysts’ consensus estimate, in the fourth quarter.

On a sequential basis, the company’s net income per share fell ~55% in the quarter. In the period, Anadarko’s total sales volumes rose 2.8%. Moreover, its total sales were exactly at the midpoint of its guidance.

The company’s oil and gas operating expenses have remained nearly constant, while its oil and gas transportation expenses have risen 4.4% per barrel—an extra burden of $10.3 million on the income statement—and exceeded the upper limit of its guidance. Aside from the fall in commodity prices, this rise in its expenses may have been one of the factors that contributed to the company’s low net income compared to analysts’ consensus estimate.

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Realized commodity prices

The fall of 28% in the average sales price of natural gas liquids may have dragged on Anadarko’s earnings along with a 14.9% fall in oil’s sales price. However, APC’s realized natural gas sales price was 29.1% higher on a sequential basis. Moreover, APC increased the share of natural gas in its total fourth-quarter sales by 30 basis points and by a maximum of one percentage point in 2019 based on its guidance.

ConocoPhillips’s (COP) average realized price per barrel for crude oil fell 12.6% on a sequential basis in the last quarter. However, natural gas prices were just ~11.2% higher than in the previous quarter. For Hess (HES), the average sale prices of oil and natural gas changed by -16.1% and 13.3%, respectively, in the fourth quarter on a sequential basis.

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