Size counts in the business world, and many company managers would sell you their grandmother if it meant a bit more growth. Not all size is truly equal, though, and AnadarkoPetroleum
For the second quarter, Anadarko reported that net revenue climbed 10% to $1.59 billion. Operating margins improved significantly (from 47.6% to 53%) and the company posted 23% operating income growth. Although reported EPS missed the mean estimate by a penny, I don't think that's a big deal at all.
Interestingly, though, while the mean estimate was $2.13, my screen shows a high estimate of $2.76 a share -- wouldn't you love to know what that analyst was thinking?
Anyways, as-reported daily average production volumes fell more than 16% to 428,000 barrels of oil equivalent per day. But, since Anadarko sold some of its properties, a straight year-on-year comparison isn't quite fair. To that end, the company reported that production volumes actually increased by 10% once adjusted for the sold properties.
Like pretty much every other oil and gas company, Anadarko reported higher realized prices for its goods. Gas prices were up 20% and oil prices were up 47%, results that are consistent with what we've seen from other energy companies.
Anadarko has not wasted the benefits of those asset sales and its improved financial performance. Long-term debt has fallen by about $1.3 billion and the company has improved its debt-to-equity ratio from about 55% a year ago to about 37% in this quarter. During that same span of time, the company also repurchased $1.7 billion worth of stock in the open market.
I won't pretend that Anadarko is the best exploration and production company out there. Smaller producers such as Apache
For more oil and gas takes:
- A Patchy Quarter for Apache
- ConocoPhillips Pumps Up Earnings
- Should PetroKazakhstan Be Pumped?
- Suncor Stuck on Tar Sands
Fool contributor Stephen Simpson owns shares of PetroChina.