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What: Shares of Crosstex Energy
So what: The midstream natural gas company, which has struggled to maintain profitability, reported a net loss of $2.4 million down from a $1.7 million profit a year ago. Its adjusted loss per share was $0.13, worse than the $0.11 analysts were looking for. Management blamed "sharply lower natural gas liquids prices" for the disappointing results, but pointed to new operating areas that should spur growth.
Now what: With an 8% yield, this is clearly a dividend play for most investors, and some probably took the opportunity to snatch up some shares at a discount just after the market opened. But with negative free cash flow this quarter and natural gas prices likely to stay suppressed, this looks like a risky play. Look for share dilution or additional debt offerings in the future or this high-flying dividend could get dinged.
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Fool contributor Jeremy Bowman holds no positions in the companies above. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.