Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- Net operating cash flow has slightly increased to $2,792.00 million or 1.71% when compared to the same quarter last year. In addition, APACHE CORP has also modestly surpassed the industry average cash flow growth rate of -6.01%.
- The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that APA's debt-to-equity ratio is low, the quick ratio, which is currently 0.58, displays a potential problem in covering short-term cash needs.
- The gross profit margin for APACHE CORP is rather high; currently it is at 58.90%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.00% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 71.7% when compared to the same quarter one year ago, falling from $1,259.00 million to $356.00 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, APACHE CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
Apache Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. The company has a P/E ratio of 10.5, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Apache has a market cap of $34.62 billion and is part of the
industry. Shares are down 3.4% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.