Why Shares of Callon Petroleum Company Popped Today

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 Callon Petroleum Company (NYSE: CPE  ) jumped 11% today after reporting earnings.

So what: Revenue dropped 8% in the fourth quarter, to $26.5 million, due to the sale of offshore fields. Net income for the quarter was $1.3 million, or $0.03 per share, which compares to a $0.4 million loss a year ago. 

Now what: Results largely matched expectations, and analysts think the company will report a $0.28 profit per share this year. The challenge will be growing production as much as anticipated after a drop year over year. Even with growth in shale production, I don't see the forward P/E ratio of 29 to be an appealing entry point with the company hovering around breakeven.

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