Newfield Exploration Shares Got Crushed: What You Need to Know
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 Newfield Exploration (NYS: NFX) fell 17% today after the company reported earnings and cut 2011 production forecast.
So what: During the third quarter, revenue was just $628 million, well below analyst estimate of $700.3 million. Earnings per share of $1.04 were below estimates of $1.16 per share, and the company also cut production forecast by 12 billion cubic feet equivalent.
Now what: There really isn't anything positive to take from this earnings report, as Newfield was a triple downer by missing on revenue, earnings, and forecast. One of the major issues going forward is the company's capital spending budget, where spending has already reached 85% of the annual budget. That will require the company to cut back on some exploration and focus on a smaller number of projects going forward.
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At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.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.