Revenue Analysis
Total and Operating Revenue: APA’s operating revenue saw an increase through the years, starting from approximately $1.8 billion in 2023-06 to roughly $2.31 billion in 2023-09, indicating significant business growth. However, in the two subsequent quarters ending in 2023-12 and 2024-03, the revenue figures are $2.17 billion and $1.95 billion, respectively, showing a downward trend.
Gross Profit Margin: Gross profit followed a corresponding trend with total revenue. It peaked at around $1.2 billion in 2023-09 and decreased to about $936 million by 2024-03. The gross profit margins also reflect this volatility.
Cost Management
Cost of Revenue: The cost of revenue fluctuated, peaking at $1.112 billion in 2023-09, and later decreased to $1.015 billion in 2024-03, which aligns with the general revenue reduction in the same period.
Operating Expense: Operating expenses varied, with notable costs like selling, general, and administrative expenses reducing from $139 million in 2023-09 to $93 million by 2024-03.
Total Expenses: Total expenses dramatically varied, with a peak at approximately $1.4 billion in 2023-09 and then a reduction to $1.34 billion by 2024-03.
Profitability Analysis
EBITDA: EBITDA was highest around $1.33 billion in 2023-09 before decreasing to about $955 million by 2024-03, mirroring revenue fluctuations.
Operating Income: Operating income peaked at about $918 million in 2023-09, with a decrease observed in subsequent quarters down to $613 million by 2024-03.
Pretax Income: Pretax income peaked at $833 million in 2023-09, significantly decreasing to $447 million by 2024-03.
Net Income: Net income followed a similar downward trend from $555 million in 2023-09 to $212 million in 2024-03.
Cash Flow Indicators
Reconciled Depreciation: Despite fluctuations in other financial areas, reconciled depreciation remained fairly stable, reflecting consistent investment in capital assets.
Interest Expense: Interest expenses showed minor variations, suggesting stable financing costs over the periods.
Taxation
Tax Rate: The effective tax rate varied, with an abrupt change observed between 0.21 in 2023-12 to 0.4 by 2024-03.
Tax Provision: Tax provision showed extreme fluctuations, from a substantial provision in 2023-06 to a negative provision in 2023-12 which suggests possible tax credits or adjustments.
Tax Effect of Unusual Items: Significant unusual items tax effects were observed, influencing overall tax calculations and showing non-recurring financial activities.
Shareholder Metrics
Diluted and Basic EPS: Earnings per share peaked in 2023-12 at $5.78 diluted and $5.79 basic, corresponding with the high net income, and dropped significantly thereafter to $0.44 by 2024-03.
Average Shares: The number of shares was relatively stable with slight variations, affecting per-share calculations.
Net Income Available to Common Stockholders: This followed the net income trend, indicating direct impacts of operational performance on shareholders.
Conclusion
APA’s financial performance has shown significant volatility over the period analyzed. While there was substantial growth in mid-2023, subsequent quarters showed a decline in revenue, profits, and earnings per share, which could be concerning to investors. The company might need to address the increasing costs and decreasing income trends. Strategic focus on enhancing operational efficiency and exploring new markets or products could be beneficial.