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 Halcon Resources were flowing in the wrong direction today, falling as much as 15% after reporting earnings this morning.
So what: Results were mostly in line with estimates, as the shale explorer and producer delivered an adjusted EPS of $0.05 on expectations of $0.06. Without adjustments, however, profits were just $0.01 per share. Revenues, meanwhile, shot up more than 600%, in line with expectations, due to a variety of acquisitions. Lease operating expense also fell sharply by 47%.
Now what: The market seems to be excessively punishing Halcon for the earnings miss, which seems worse when looked at percentage-wise, as net income was about 20% below expectations. The market was perhaps expecting an earnings beat. That may look problematic, but the shale plays on which Halcon Resources are focused have serious growth potential. I wouldn't give up on Halcon just yet. You can keep track of all the latest developments by adding the company to your Watchlist here.
The article Why Halcon Resources Shares Tumbled originally appeared on Fool.com.
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