APA Corp Gears Up to Report Q2 Earnings: Here's How It Will Fare

Highlights of APA’s Q1 Earnings & Surprise History

In the last reported quarter, the independent oil and gas explorer beat the consensus mark, driven by higher realized oil prices and lower year-over-year expenses. APA posted adjusted earnings per share (EPS) of $1.38, which beat the Zacks Consensus Estimate of $1.01. Moreover, revenues of $2.2 billion beat the Zacks Consensus Estimate by 4.8%. The company’s earnings have surpassed the Zacks Consensus Estimate in each of the last four quarters, resulting in an average surprise of 50.6%.

This is depicted in the graph below: 

APA’s Trend in Estimate Revision

The Zacks Consensus Estimate for second-quarter 2026 earnings has remained unchanged over the past seven days. The estimated figure indicates a 112.6% rise year over year. The Zacks Consensus Estimate for revenues implies a 6.8% year-over-year decline.

Factors to Consider Ahead of APA’s Q2 Release

APA Corp is an independent energy company focused on the exploration and production of oil and natural gas. Its primary operations involve discovering, developing and extracting crude oil, natural gas and natural gas liquids. With a strong presence in the United States, Egypt and the North Sea, the company is also expanding its exploration activities in Suriname. APA earns revenues from the sale of hydrocarbon products, with its earnings closely linked to production volumes and fluctuating market prices for oil and gas.

APA's second-quarter results could face pressure from continued natural gas curtailments in the Permian due to weak Waha pricing, reducing U.S. barrels of oil equivalent volumes. Egypt's adjusted production is expected to decline sequentially because higher Brent prices affect PSC accounting volumes, while inflationary pressures on diesel and other operating costs persist. Rising decommissioning activity and management's cautious capital allocation stance may also weigh on near-term earnings performance.

APA Corp operates in regions like Egypt, which carry geopolitical risks. We expect any regional uncertainties or operational complexities to remain a potential overhang on production stability and investor sentiment. Our model predicts that the total daily production of the company in the second quarter will reduce by about 13% year over year.

APA’s revenues are likely to decline in the quarter to be reported. The Zacks Consensus Estimate for second-quarter revenues is expected to be lower than the year-ago figure of $2.6 billion.

On a bullish note, the decrease in APA’s costs might have improved its to-be-reported bottom line. We expect the company’s total expenses to reach $1.4 billion in the second quarter, down from $1.6 billion in the same quarter last year.

According to our model, the following expenses are expected to decrease year over year: Gathering, Processing, and Transmission, Purchased Oil and Gas Costs and Exploration expenses.

What Does Our Model Say About APA?

Our proven model does not predict an earnings beat for APA Corp this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that’s not the case here.

Earnings ESP of APA:  Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -1.60%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

APA’s Zacks Rank: APA Corp currently carries a Zacks Rank #4 (Sell).

Stocks With the Favorable Combination

Here are some firms from the energy space that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.

Targa Resources Corp. TRGP currently has an Earnings ESP of +4.33% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug. 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

Targa Resources is a premier energy infrastructure company that provides integrated midstream services in North America. Notably, the Zacks Consensus Estimate for Targa Resources’ 2026 earnings per share indicates 27.1% year-over-year growth. Valued at around $56.2 billion, TRGP’s shares have rallied 56.1% in a year.

Plains All American Pipeline, L.P. PAA currently has an Earnings ESP of +6.71% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug. 7.

Plains All American is a master limited partnership involved in the transportation, storage, terminalling and marketing of crude oil, natural gas, natural gas liquids (NGL) and refined products in the U.S. Notably, the Zacks Consensus Estimate for Plains All American’s 2026 earnings per share indicates 0.65% year-over-year growth. Valued at around $17.24 billion, PAA’s shares have risen 32.9% in a year.

Calumet, Inc. CLMT currently has an Earnings ESP of +169.57% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug. 7.

Calumet manufactures, formulates and markets a diversified slate of specialty branded products and renewable fuels to customers across a broad range of consumer-facing and industrial markets. Notably, the Zacks Consensus Estimate for Calumet’s 2026 revenues indicates 6.3% year-over-year growth. Valued at around $3.6 billion, CLMT’s shares have surged 158.2% in a year.

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This article originally published on Zacks Investment Research (zacks.com).

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