Apache's 3Q Profit Falls 63% On Lower Commodity Prices

   DOW JONES NEWSWIRES 
 

Apache Corp.'s (APA) third-quarter profit fell 63% on lower commodity prices, although worldwide production grew.

Shares dropped 1% to $92.96 in premarket trading as earnings were slightly short of analysts' expectations. As of Wednesday's close, the stock was up 26% this year.

The company produces more oil than natural gas, which has somewhat helped mitigate the effect of the drastic drop in commodity prices as crude prices are beginning to rebound.

Apache reported earnings of $442 million, or $1.30 a share, down from $1.19 billion, or $3.52 a share, a year earlier. Excluding items such as a deferred-tax impact, income fell to $1.58 a share from $3.19 a share.

Revenue dropped 31% to $2.33 billion.

Analysts surveyed by Thomson Reuters expected earnings of $1.61 a share on revenue of $2.24 billion.

Production jumped 3.4% from the second quarter and 19% from a year earlier. Apache said it was the first time production surpassed 600,000 barrels of oil equivalent daily. Prices for both oil and gas were well below those a year earlier, but per-barrel oil prices jumped 12% from the second quarter. That jump came amid a recent rally in crude oil prices on investor concern over the weakening dollar. Gas prices, though, fell 0.6% from the second quarter.

Chairman and Chief Executive G. Steven Farris said the company was on track to post record production this year and would enter 2010 with strong momentum, including two development projects in Australia that could boost output by 40,000 barrels of oil per day.

-By John Kell, Dow Jones Newswires; 212-416-2480; [e-mail]