Anadarko Beats Quarterly Profit Estimates and Raises Forecast

May 06, 2014 12:00 am ET

May 6 (Bloomberg) -- Anadarko Petroleum Corp., the global explorer that discovered more than 6 billion barrels of oil and natural gas in the past decade, reported first-quarter profit that surpassed analysts’ estimates as the company raised its 2014 forecast.

Anadarko had a net loss of $2.67 billion, or $5.30 a share, from a profit of $460 million, or 91 cents, a year earlier, stemming from a $5 billion legal settlement, The Woodlands, Texas-based company said in a statement yesterday. Excluding settlement costs and other one-time items, per-share earnings of $1.26 exceeded the $1.15 average of 29 analysts’ estimates compiled by Bloomberg.

“They beat what we were looking for, they beat what consensus was, and a lot of it was really driven by the strength in production,” Andrew Coleman, an analyst at Raymond James & Associates Inc. in Houston, said in a phone interview yesterday. With the Tronox bankruptcy effectively settled, more investors may be attracted to invest in the stock, he said.

Chairman and Chief Executive Officer Al Walker plans to spend as much as $8.8 billion this year on projects from the Gulf of Mexico to New Zealand after Anadarko settled an environmental lawsuit that had dragged on shares. The company agreed last month to pay the U.S. Justice Department $5.15 billion to clean up pollution left behind by its Kerr-McGee unit, which it acquired in 2006.

Higher Guidance

Revenue rose 50 percent to $5.84 billion from $3.89 billion a year ago, driven by higher production. The company reported record sales volumes of the equivalent of 819,000 barrels a day that topped the midpoint of its previous estimate by 10,000 barrels.

Anadarko boosted the midpoint of its 2014 sales-volume guidance by the equivalent of 3.5 million barrels of oil. The company now forecasts selling an average of between 293 million and 298 million barrels this year.

The company continues to develop a discovery off the coast of Mozambique that may contain 70 trillion cubic feet of gas, enough to meet annual U.S. residential demand for 14 years. The company’s oil production has been rising in Texas and Colorado.

Brent crude futures, the global benchmark, declined 4.2 percent to average $107.92 a barrel in the January-to-March period, according to data compiled by Bloomberg. U.S. gas prices climbed 35 percent to average $4.712 per million British thermal units during that period.

The earnings report was issued after the close of regular trading in New York. Anadarko rose 3.9 percent to $101.79 after the close. The shares, which have 33 buy ratings and five holds from analysts, have risen 26 percent this year.