There has been little to cheer about this earnings season, and even mediocre news has brought hope to some. However, today Anadarko Petroleum (NYSE: APC), one of my long time favorites, has reported that profits rose three-fold to $824 million, or $1.79 a share, versus $264 million, or 56 cents a share, from last year.This result is in good part due to the sale of a Brazilian oil field and non-cash hedging gains related to derivatives.
The company missed EPS estimates by two cents as revenues rose 24% to $3.8 billion. Management reported its fourth-quarter production of crude, and natural gas and natural gas liquids slipped about 2% to 52 million barrels of oil equivalent. But full-year production was up 5% compared with 2007. APC reported a 17% annual sales-volume growth in the Rockies.
"We consistently met or surpassed our operating objectives in 2008, demonstrating the resiliency and quality of our asset portfolio," Anadarko Chairman and CEO Jim Hackett said. "We exceeded our guidance for organic reserve adds and production replacement, while also overcoming an approximate 13-million-barrel production impact from hurricanes and third-party interruptions to achieve our production targets for the quarter and the year."
It has also been reported that Anadarko Petroleum discovers oil in deepwater Gulf of Mexico.Currently the stock is yielding about 1% while its trailing P/E ratio is hovering around 6.5. This is likely to go up in the future as oil remains greatly discounted from the highs of six months ago, and natural gas pricing is trading at relative lows as well. Earnings projections in 2009 anticipate a downward trend. When I recommended the stock it was trading about $5 lower. It closed yesterday at $36.09 and is up $1.68 to $37.77 in mid-day trading.
More about Anadarko can be found in Chasing Value: 9 picks for 2009 -- APC, GE, ISRG, WFC and more.
Update: closing price $37.50, up $1.41 or 3.91%
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of APC.
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