Anadarko Petroleum (APC) Stock Down on Supreme Court Decision, Oil Prices

NEW YORK (TheStreet) --Shares of Anadarko Petroleum (APC) are slipping by 3.21% to $78.75 in late afternoon trading on Monday, following the Supreme Court's decision to reject proposals from Anadarko and BP PLC (BP) to evade federal pollution law penalties in connection with the 2010 oil spill in the Gulf of Mexico, Reuters reports.

The court upheld a June 2014 ruling by the 5th Circuit Court of Appeals in New Orleans which determined that both companies were responsible for civil damages under the federal Clean Water Act.

Anadarko, an independent exploration and production company, may have to pay over $1 billion as a result, Reuters added.

In April of 2010 the Deepwater Horizon drilling rig exploded and the Macondo oil well ruptured killing 11 workers, caused the largest offshore environmental disaster in American history and polluting larger portions of the Gulf, killing marine life and disrupting businesses, Reuters added.

Additionally, Anadarko Petroleum is also taking a hit from today's decline in oil prices. The commodity is falling following developments in Greece stemming from the country's debt crisis.

Crude oil (WTI) is lower by 2.43% to $58.18 per barrel and Brent crude is down by 2.17% to $61.89 per barrel this afternoon, according to the CNBC.com index.

Separately, TheStreet Ratings team rates ANADARKO PETROLEUM CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ANADARKO PETROLEUM CORP (APC) a HOLD. The primary factors that have impacted our rating are mixed-some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • APC, with its decline in revenue, slightly underperformed the industry average of 38.7%. Since the same quarter one year prior, revenues fell by 40.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ANADARKO PETROLEUM CORP's earnings per share declined by 21.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ANADARKO PETROLEUM CORP swung to a loss, reporting -$3.51 versus $1.57 in the prior year. This year, the market expects an improvement in earnings (-$1.96 versus -$3.51).
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 22.4% when compared to the same quarter one year ago, dropping from -$2,669.00 million to -$3,268.00 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ANADARKO PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$4,504.00 million or 360.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: APC Ratings Report

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