Anadarko Petroleum (APC) posted better-than-expected numbers for the second quarter. It reported a net loss (continuing operations) of 47 cents per share, lower than the Zacks Consensus Estimate of 66 cents. The company has raised the sales volume guidance for 2009 by 2-3 million BOE to 210-215 million BOE and kept the capex budget intact at $3.9-$4.4 billion.
 
Anadarko’s deep and diversified asset base, low-risk and predictable production profile, global business development approach and brilliant execution capability reflect visible upside over medium-to-long run. Moreover, a strong balance sheet, investment-grade rating and access to liquidity will enable the company to pursue new strategic and tactical growth opportunities, particularly at a time when valuations are depressed.
 
Anadarko has been continuously evaluating capital allocations to ensure that the on-track projects are value accretive. It has been able to preserve financial flexibility and drive down service costs to stay competitive under the present challenging business environment.
 
However, the current unfavorable macro backdrop remains a concern and might overshadow the positives, at least in the near-term. We see Anadarko performing in line with the broader market and thus maintain Neutral recommendation.
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