Deutsche Bank's Ryan Todd sees operational momentum building in Anadarko Petroleum Corporation APC, which reported smaller-than-expected first-quarter loss, as it cut costs to offset the slump in oil prices.
The company posted adjusted loss of $1.12 per share, topping Street view of loss of $1.16 a share. The company posted a net loss of $1.03 billion, or $2.03 per share, narrower than loss of $3.27 billion, or $6.45 per share, in the year-ago quarter. Quarterly revenue fell 28 percent to $1.67 billion.
"Alongside a disclosed ~$700 million in incremental near-term asset sales (toward a targeted $2–$3 billion), operational execution continues to build momentum," Todd explained.
"[W]hile a stubborn outspend ($450 million in 2017 at $50/bbl) and a focused de-levering of its balance sheet (52 percent net debt to cap) will likely limit upside to a recovery, the incremental rate of change remains positive," the analyst added.
Todd noted that the company's cash opex of $10.80/boe (ex restructuring charges) was a sizeable beat (-$1.2/boe vs. DBe) and a 4 percent haircut to prior FY16 LOEs/transport cost targets "speaks to conviction on sustained momentum."
Shares of Anadarko fell 5.1 percent to $49.30 early Tuesday afternoon. Todd has a Hold rating and $58 price target on the stock.
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