Anadarko Petroleum Shares Meet Resistance Ahead of Q4 Earnings Release

Published on Monday, 06 February 2012 13:23 Written by J Hawk

New York, February 6^th (TradersHuddle.com) – Shares in Houston, Texas based Anadarko Petroleum Corporation (NYSE: APC) were somewhat lower in today’s trading session ahead of the independent energy exploration company’s key fourth quarter 2011 earnings results, which are expected to be released later today, February 6^th after the stock market’s close. 

Earlier today, the stock market had taken Anadarko shares as low as $81.98. Nevertheless, as of this writing, the energy stock had recovered some of its initial losses, and was trading down just-$1.68 or -1.99% on the day to the $82.66 per share level in moderate New York Stock Exchange trading volume of 1.3 million shares.

Analysts Expect Q4 Earnings of $0.60 for Anadarko

According to a survey of 20 market analysts performed by Zacks Investment Research, the consensus earnings forecast for Anadarko Petroleum is for earnings per share of $0.60 in Q4 2011. A slightly larger group of 23 analysts are calling for total 2011 earnings results of $3.11 per share.

Over the past month, analyst earnings forecast upgrades and downgrades have been equally split between higher and lower revisions, with seven changes reported in each category, according to Zacks.

The range of Q4 2011 earnings per share forecasts for Anadarko Petroleum was as high as $0.76 per share, and as low as $0.46 per share, demonstrating a fairly wide range around the consensus.

Large Q3 2011 Loss Was Blamed on Gulf Oil Spill

The petroleum firm had reported a notable Q3 2011 loss last October of -$3.051 billion. The exceptionally negative result was primarily attributed to a $4 billion settlement the company had made with British Petroleum or BP.

BP was Anadarko’s partner in the disastrous Deepwater Horizon Oil Spill in the Gulf of Mexico that began on April 20^th of 2010. The largest accidental oil spill ever was caused by an explosion at a deep sea oil rig that gushed almost 5 million barrels of oil until it was finally capped on July 15^thof that year.

On October 17^th, 2011, Anadarko Chairman and CEO Hackett stated, "This settlement agreement with BP is the right action for our stakeholders, as it removes significant uncertainty regarding future liabilities and associated risks. With this issue resolved, we believe focus will return to the tremendous value embedded in our asset base and the company's operational and exploration success that have been under-valued during the last 18 months."

The Technical Picture for APC is Bullish but Key Resistance Looms

From a technical perspective, Anadarko Petroleum’s share price has shown a medium term upwards trend after sinking to a notable low last October in the wake of the firm announcing the $4 billion settlement with British Petroleum.

The stock bottomed out at the $57.11 level on October 4^th of 2011, but has since shown promise as it again approaches strong resistance expected at its long term high point of $85.50 last seen on April 8^th of last year. The stock has traded as high as the $84.49 level thus far this year, with that peak seen very recently during February 3^rd’s trading session. 

Initial resistance is noted at $84.49, and then above that at the long term high points of $85.25 and $85.50, which have each sparked substantial downside reversals in the past. A break above $85.50 on substantial trading volume would be quite bullish for the stock.

Support for the stock shows initially at the $82.63, $82.47, $81.98 and $81.21 levels, and then below that at $77.60, $75.34 and $71.18.