Can Callon Acquisition Help APA Post Strong Q2 Earnings?

Core Viewpoint - APA Corporation is expected to report second-quarter results on July 31, with a consensus estimate of 95 cents per share and revenues of $2.3 billion, reflecting a year-over-year increase in both earnings and revenues [1][4]. Group 1: Previous Quarter Performance - In the last reported quarter, APA missed the consensus earnings estimate of 90 cents, reporting adjusted earnings of 78 cents, while revenues of $1.9 billion exceeded expectations by $29 million due to higher commodity prices [2]. - The company has a trailing four-quarter earnings surprise average of 5.5%, having surpassed estimates twice and missed twice [2]. Group 2: Estimate Revisions - The Zacks Consensus Estimate for the second-quarter earnings has been revised downward by 12% in the past week, indicating a 24.7% rise year-over-year, while revenue estimates suggest an 18% increase from the previous year [4]. Group 3: Production and Costs - APA is anticipated to benefit from increased domestic production, with expected average second-quarter volumes at 292,395 barrels of oil equivalent per day (BOE/d), a 37.4% increase from the previous year [5]. - However, lease operating expenses and property/equipment costs are projected to rise significantly due to inflation, with estimates of $459.7 million and $596.2 million, reflecting increases of 27.4% and 68.4% respectively from the prior year [6]. Group 4: Earnings Prediction Model - The Zacks model does not predict an earnings beat for APA, as the Earnings ESP is -3.37% and the company holds a Zacks Rank of 3 (Hold) [7]. Group 5: Alternative Investment Opportunities - Other energy firms with better earnings prospects include Enterprise Products Partners L.P. with an Earnings ESP of +4.25% and a Zacks Rank of 3, and Northern Oil and Gas with an Earnings ESP of +1.82% and a Zacks Rank of 3 [8][9].