Anadarko Petroleum 2nd-quarter net off sharply

HOUSTON (Reuters) - Anadarko Petroleum Corp (APC.N) said on Monday that its second-quarter net income dropped sharply on losses related to hedging, and year-ago results included a big gain for asset divestitures.

The independent oil and gas exploration and production company said net income in the quarter fell to $23 million, or 5 cents per share, from $1.3 billion or $2.81 per share in the same period a year earlier.

Results for the 2008 second-quarter included $1.02 billion in unrealized losses on derivatives, while the year-ago quarter included an after-tax gain of $951 million related to asset divestitures.

Total oil and gas production fell about 4 percent from a year ago to 548,000 barrels oil equivalent per day.

On an adjusted basis, the independent oil and gas company reported a profit of $831 million, or $1.76 per share, compared with $417 million, or 89 cents per share in the same period a year earlier.

Analysts on average had expected the Houston company to report a profit of $1.72 per share, according to Reuters Research.

Revenue fell to $2.79 billion from $4.59 billion.

Last year, Anadarko sold billions in assets to help pay down the debt it rang up in its $22.5 billion cash deal to buy rivals Kerr-McGee Corp and Western Gas Resources Inc.

Looking ahead, Anadarko said it still expects 2008 production of 207 million to 212 million barrels of oil equivalent.

(Reporting by Anna Driver in Houston; editing by Carol Bishopric)