Why APA Corporation Stock Rocked the Market Today

Key Points

• The company notched a pair of convincing beats in its second quarter.

• It crushed the average analyst projection for adjusted net income.

• 10 stocks we like better than Apa ›

Habitually profitable oil and gas company APA Corporation (NASDAQ: APA) posted a better-than-expected bottom line in its second quarter after market close Wednesday. Investors rewarded this by pushing its stock nearly 8% higher the following trading session. That compared very well to the S&P 500 index, which ended the session slightly down from Wednesday's close.

Holding up well in the second quarter

Oil prices weren't what they were not so long ago, so APA posted operational and financial declines in the quarter.

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Image source: Getty Images.

On the back of a 2% year-over-year slide in barrels of oil equivalent (BOE) per day to 465,078, total revenue slipped to $2.61 billion from the year-ago quarter's $2.79 billion. Generally accepted accounting principles (GAAP) net profit headed in the opposite direction, rising to $665 million from $620 million. On a non-GAAP (adjusted), per-share basis, however, APA earned $0.87 on the bottom line against $1.17.

Yet these results were more than good enough to top the average analyst estimates -- to understate the case. These called for an adjusted, bottom-line profit of merely $0.45 and total revenue of $2.07 billion.

Upside surprises both at home and abroad

APA attributed the better-than-expected performance to several factors, not least of which was its operations in the Permian Basin. It said that its oil production there exceeded its own guidance despite a significant (25%) reduction in rig count.

Similarly, overseas it topped its internal targets for gas production, and in a hopeful note for the future, increased its forecasts for this in the second half of 2025.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.