Why Halcon Resources Shares Tumbled

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 (NYSE: HK  ) 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.

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

DocumentId: 2405579, ~/Articles/ArticleHandler.aspx, 4/20/2014 4:06:18 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.