Why Rosetta Resources’ Shares Plunged

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 energy explorer Rosetta Resources (NASDAQ: ROSE  ) dropped as much as 11% after the company reported earnings.

So what: Revenue for the fourth quarter rose 31% to $178.3 million but fell short of the $183 million analysts expected. On the bottom line, profit was $42.3 million, or $0.80 per share, but analysts were expecting $0.93 per share in profit.  

Now what: Keep in mind that results were vastly improved from a year ago even if they did fall short of expectations. Shares are trading at just 11 times forward estimates and even if they're revised slightly lower investors are getting a reasonable deal given production growth. I think this is a short-term blip and shares will move higher as fundamentals continue to improve.

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


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