Anadarko Petroleum Corporation (NYSE:APC), with a market cap of approximately $43.9 billion, is a company engaged in the exploration and production of oil and natural gas. It operates in three segments: oil and gas exploration and production, midstream and marketing.
Oil and gas production increased 13% to a record 793,000 barrels of oil equivalent per day. Anadarko Petroleum Corporation (NYSE:APC) also raised the top end of its full-year production forecast to a range of 279 million to 287 million boe (up from 279 million to 285 million boe). Anadarko Petroleum Corporation (NYSE:APC) also improved its financial position and ended Q1 with about $3.7 billion in cash.
Anadarko Petroleum Corporation (NYSE:APC)’s solid Q1 results were achieved with management’s “commitment to accelerate value by increasing production in the company’s core operating areas, selectively monetizing assets and delivering large-scale projections on budget,” as stated by president and CEO Al Walker in a report.
Analysts’ calls and estimates
Analysts, on average, are estimating EPS of $4.13 with revenue of $15.2 billion for 2013, which is 13.4% higher than 2012. With another earnings beat, Anadarko Petroleum Corporation (NYSE:APC) had five consecutive positive earnings surprises in the last five quarters. Analysts have a mean target price of $107.17, suggesting 22.3% upside potential based on the closing price of $87.62 on May 6.
Fundamentally, Anadarko’s key stats will be compared to its peers in the industry of oil & gas exploration and production, including Apache Corporation (NYSE:APA) and Devon Energy Corp (NYSE:DVN).
| Anadarko | Apache | Devon Energy | Industry Average | |
|---|---|---|---|---|
| Market Cap | $43.9billion | $29.8 billion | $23.7 billion | N/A |
| P/E | 18.3 | 15.3 | -12.2 | N/A |
| Revenue Growth (3 Year Average) | 14.2 | 25.6 | 5.8 | -2.8 |
| Net Margin, %, ttm | 17.8% | 11.3% | -21.6% | 13.1% |
| ROE | 12.4 | 6.7 | -9.3 | 8.7 |
| ROA | 4.6 | 3.4 | -4.6 | 3.9 |
| Debt/Equity | 0.6 | 0.4 | 0.4 | 0.5 |
Source: Morningstar
Apache Corporation (NYSE:APA), an independent energy company, has a balanced portfolio of onshore and offshore oil and gas properties globally. With a lower than expected Q1, 2013 report, Apache plans to divest $4 billion of assets to pay down debt and repurchase shares (30 million shares). However, Apache has the highest revenue growth (three year average) among these three companies.
Devon Energy Corp (NYSE:DVN) is another independent energy company engaged in oil and gas exploration and production. Devon also had a disappointing Q1 with a $1.3 billion loss ($3.34 per-share loss) compared to $393 million ($0.97 per-share profit) in Q1 2012. The loss was mainly due to a $1.9 billion charge related to low prices for natural-gas liquids and crude oil. However, more growth is expected for Devon over the long term with its broad portfolio of growth-oriented oil and gas assets, backed by a healthy balance sheet.
Compared to Apache and Devon, Anadarko has a higher net margin, ROE, and ROA. Anadarko also has higher revenue growth compared to the industry average. With $3.7 billion cash on hand at the end of Q1, 2013, Anadarko continues to strengthen its balance sheet.
As for the share-price performance, Anadarko continues to be on a long-term uptrend since November 2012. Anadarko has an uptrend support near $80. Anadarko is also trading above its 50-day and 200-day moving averages.
Bottom line
Anadarko continued to deliver with another solid quarterly report. Management has done a great job monetizing assets and increasing production. There is reason to be optimistic about the 2013 outlook. In the long term, there is more upside potential for this solid E&P energy company.
Disclaimer: Investors and traders are recommended to do their own due diligence and research before making any trading/investing decisions.
The article This E&P Energy Play Continues to Impress originally appeared on Fool.com and is written by Nick Chiu.
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