Benzinga | Feb 23, 2021 10:20AM EST

Earnings Preview: Apache

Apache (NASDAQ:APA) announces its next round of earnings this Wednesday, February 24. Here is Benzinga's everything-that-matters guide for this Wednesday's Q4 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Apache EPS will likely be near $0.11 while revenue will be around $1.05 billion, according to analysts. In the same quarter last year, Apache announced EPS of $0.08 on revenue of $1.70 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate when it reports Wednesday, earnings would be down 237.5%. Revenue would be down 38.09% from the year-ago period. Apache's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate -0.35 -0.98 -0.30 -0.06EPS Actual -0.16 -0.74 -0.13 0.08Revenue Estimate 992.30 M 729.65 M 1.30 B 1.61 BRevenue Actual 1.14 B 596.00 M 1.28 B 1.70 B

Stock Performance

Shares of Apache were trading at $19.08 as of February 22. Over the last 52-week period, shares are down 26.98%. Given that these returns are generally negative, long-term shareholders are probably down going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Apache is scheduled to hold the call at 11:00:00 ET and can be accessed here.