Goodrich Petroleum Shares Plunged: What You Need to Know (GDP)

Goodrich Petroleum Shares Plunged: What You Need to Know

By Cindy Johnson | More Articles
February 18, 2011 | Comments (0)

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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: Goodrich Petroleum Corp. (NYSE: GDP ) shares dropped 10% in intraday trading today after fourth-quarter GAAP EPS of -$0.59 came in well below the consensus of -$0.27.

So what: The earnings release did not explain the big disappointment, but noted that prices declined from the year-ago quarter. Despite a 13% increase in revenue, net cash provided by operating activities declined 34% year-over-year.

Now what: Management said it expects 2011 production volumes to grow 10% to 20% after factoring in a recent divestiture, and it anticipates further reductions in per-unit lease operating expenses. It did not comment on the pricing outlook. The company has not reported a profitable quarter since the third quarter of 2008, and had impairment charges of $235 million and $209 million in 2010 and 2009, respectively. Today's earnings release suggests investors should stay on the sidelines pending evidence the company can return to profitability.

Interested in more info on GDP? Add it to your watchlist here by clicking here.

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Fool contributor Cindy Johnson does not own shares of any company named above. 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.

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