Anadarko Petroleum ( APC) Thursday cut its crude oil and natural gas sales guidance but raised its second-quarter and full-year estimated earnings to above analysts' consensus forecast.

The company cited production shortfalls, especially in the Gulf of Mexico, for the lower sales, which are expected to continue into next year. But Anadarko said higher commodity prices will bump up overall earnings and offset the lower volumes.

The Houston-based company lowered its full-year volume forecast to 190 million barrels from 200 million barrels. U.S. offshore volume was decreased to 17 million barrels from 22 million barrels. Production for the second quarter was cut to 46 million barrels from 48 million barrels.

Anadarko now expects to earn $311 million, or $1.24 a share, in the second quarter, compared with its previous estimate of $1.15 a share. For the full year, the company expects earnings of about $1.46 billion, or $5.77 a share, compared with its prior projection of $1.39 billion, or $5.51 a share.

Analysts expect $5.20 a share for the full year and $1.21 a share for the second quarter. The company earned 93 cents a share in last year's second quarter and $3.21 a share for the year.

Anadarko was downgraded by Wachovia Securities and Deutsche Banc on the news of the expected production miss. Wachovia cut the company's rating to underperform from market perform and also cited low growth visibility and potentially expensive acquisitions. The company's price target was also lowered to $47 from $50.

Further, Wachovia cut second-quarter production estimates. The firm also took down its earnings estimates on Anadarko to $1.24 from $1.29 for the quarter and to $4.63 from $5.22 for the year.

Echoing Wachovia's sentiment, Deutsche Banc said: "The company has its work cut out for itself and we see little to get shares moving in the right direction anytime soon." The firm downgraded Anadarko's rating to hold from buy and cut its price target to $47 from $57. Deutsche Banc lowered its 2003 earnings estimate to $5.29 from $5.70 a share.

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