APA Reports Record Revenue in Q4; Shares Pop

Shares of APA Corporation (APA) gained 5.7% after the company reported strong growth in revenues for the fourth quarter of 2021. The company engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids.

The company reported adjusted earnings of $1.29 per share that lagged analysts’ expectations of $1.46 per share. However, the figure compares favorably with a loss of $0.05 per share reported in the same quarter last year.

Q4 revenues came in at $2.4 billion, which almost doubled year-over-year and surpassed the consensus estimate of $1.9 billion. Oil revenues, which contribute 52.9% to the total revenues, rose 63.8%.

During the quarter, APA reported production of 386,000 barrels of oil equivalent (BOE) per day. Also, it generated net cash from operating activities of $1.1 billion, up from $498 million in the last year’s quarter.

Guidance

APA expects to generate about $6.5 billion of FCF over the next three years based on a WTI price of $78 per barrel. The company continues to streamline its portfolio and expects the $805 million mineral rights sales package in the Delaware Basin to close by the end of February.

Stock Rating

Overall, the Street has a cautious outlook on the stock with a Moderate Buy consensus rating based on 8 Buys and 5 Holds. The APA stock price prediction of $40.46 implies upside potential of about 25.8% from current levels.

Hedge Fund Trading Activity

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in APA is currently Very Negative, as the cumulative change in holdings across all 12 hedge funds that were active in the last quarter was a decrease of 21.3 million shares.

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