Why Pioneer Energy Shares Shot Up


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 oil-and-gas drilling specialist Pioneer Energy Services were booming today, jumping as much as 19% after reporting a strong fourth quarter.

So what: The energy services provider topped earnings estimates by $0.10, posting per-share profits of $0.06 on expectations of a $0.04 loss. Pioneer also grew 12% to $227.9 million, beating the Street's projections of $222.6 million. Pioneer added six rigs during the quarter, and CEO William Stacy Locke credited the quarter's success on the company's new-build drilling rig program, saying the rigs have "reduced initial startup costs" and "will generate substantial cash flow."

Now what: Pioneer shares have floundered over the past couple of years despite the general boom in oil and gas drilling, and it's tempting to think it will be better positioned with the new-build drilling program set to be completed at the end of the quarter. Still, Pioneer has more than $500 million in debt, which it is planning to pay off, and analysts are expecting flat growth and almost no profits this year. I'd like to see a few more earnings beats before I'm convinced.

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The article Why Pioneer Energy Shares Shot Up originally appeared on Fool.com.

Fool contributor Jeremy Bowman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

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