Why Triangle Petroleum Corporation's Shares Plunged

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of energy explorer Triangle Petroleum Corporation fell as much as 10% in trading today after the company reported earnings.

So what: Revenues jumped 315.7% to $88.6 million, easily topping estimates of $72.0 million. The problem is that earnings of $0.18 per share fell six cents short of estimates and considering the revenue beat it means that margins are far lower than expected.  

Now what: Triangle Petroleum is in a major expansion mode so I would be less worried about short-term profits and focus on revenue growth. That's why the 47% sequential improvement in revenue was so impressive. Given the revenue growth and swing to profitability I think the stock is a reasonable value and I definitely don't see the bottom line miss as a reason to jump ship today.

How to invest in energy now
The Motley Fool is offering a comprehensive look at three energy companies set to soar as the energy industry evolves and you can find out more in the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

The article Why Triangle Petroleum Corporation's Shares Plunged originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading