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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