Why LRR Energy's Shares Dropped

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 LRR Energy (NYSE: LRE  ) dropped as much as 10% today after the company released earnings.

So what: Revenue dropped nearly 50%, to $15.8 million, and the company swung to a loss of $7.5 million, or $0.32 per share. Analysts had expected $28.4 million in revenue, and earnings of $0.13 per share. 

Now what: Production is definitely falling behind expectations, and management expects full-year production to be between 6,250 and 6,550 Boe/day. The good news is that management is paying a $0.4825 per share distribution to shareholders who owned the stock yesterday. The company can't continue that distribution with these results, so I'd be cautious buying shares after the company lost money last quarter.

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


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  • Report this Comment On May 02, 2013, at 9:58 PM, HectorSector wrote:

    The company had these results in hand when it raised the distribution rate just two weeks ago. Obviously management feels differently about the immediate prospects than this article's poorly informed author.

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