Shares of U.S. oil and natural gas driller Comstock Resources (NYSE: CRK) fell sharply out of the gate on Nov. 5, dropping just shy of 13% in the first few minutes of trading. Although they quickly gained back some of that ground, the shares remained lower by around 7% at 10 a.m. EST. The company's after-market earnings release on Nov. 4 was the main driver here.
The energy sector , particularly in the United States, is deeply out of favor today. The severe drop in demand that resulted from the economic shutdowns used to slow the spread of COVID-19 have caused a massive supply-demand imbalance. Oil and gas prices have been weak for months. And that is showing up in the earnings of companies like Comstock. In the third quarter, it lost $0.57 per share, versus a loss of just a penny a share in the same period of 2019. Adjusted net income came in at a loss of $0.06 per share compared with a profit of $0.17 in the same stanza of 2019. Production was actually higher year over year in the quarter, so the weak performance was largely driven by a 14% drop in the company's realized selling price for natural gas and a nasty 35% decline on the oil side. No wonder investors were downbeat.
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Why Comstock Resources Stock Sunk 13% at the Open Today