APA Q3 Earnings Miss Even as Callon Buyout Drives Production

Core Viewpoint - APA Corporation reported third-quarter 2024 adjusted earnings of $1 per share, missing the Zacks Consensus Estimate of $1.03 and declining from the previous year's adjusted figure of $1.33, primarily due to lower commodity prices and higher costs [1] Financial Performance - Revenues for the quarter were $2.5 billion, representing a 10% increase from the same quarter last year and exceeding the Zacks Consensus Estimate by 11.7%, driven by the Callon Petroleum acquisition and higher-than-expected production [2] - The average realized crude oil price was $78.06 per barrel, down 9.4% from $86.15 a year ago, but above the projected $73.90. The average realized natural gas price fell to $1.43 per thousand cubic feet from $3.12 in the previous year, missing the estimate of $1.80 [6] Production and Costs - Oil and natural gas production averaged 467,480 BOE/d, up 13.4% year over year and surpassing expectations of 450,458 BOE/d [4] - U.S. output increased by 33.3% year over year to 300,709 BOE/d, while international production decreased by 10.6% to 166,771 BOE/d [5] - Total operating expenses nearly doubled to $2.9 billion from $1.7 billion, driven by increased lease operating expenses, higher equipment costs, and an asset impairment charge [7] Cash Flow and Shareholder Returns - The company generated $1.3 billion in cash from operating activities and incurred $698 million in upstream capital expenditures, resulting in an adjusted operating cash flow of $1.1 billion and free cash flow of $219 million, down from $307 million a year ago [8] - APA continued to reward shareholders with dividends and buybacks, repurchasing 102,305 shares at $29.32 each and paying out $92 million in dividends during the quarter [3] Guidance - APA expects adjusted production to average 415,000 BOE/d in Q4 and 384,000 BOE/d for the full year 2024, with oil volumes projected at 218,000 Bbl/d for Q4 and 198,000 Bbl/d for the year. The upstream capital expenditure for the year is pegged at $2.75 billion [10]