Last week brought a new record high for the S&P 500 (SNPINDEX:^GSPC) and brought the Dow Jones Industrials (DJINDICES:^DJI) to within striking distance of an all-time record of its own. Yet Tuesday morning brought more bad news from the energy sector, and the gloomy mood hanging over the oil and gas arena led to a loss in bullish momentum for the overall market. As of 11:45 a.m. EST, the Dow was down 19 points, having fallen back below the 18,000 level earlier in the session. Among the biggest contributors to the downbeat outlook for energy were Helix Energy Solutions (NYSE:HLX), Gulfmark Offshore (NYSE:GLF), and Vanguard Natural Resources (NASDAQ: VNR), each of which fell dramatically after releasing quarterly results earlier today.
Helix Energy sank 15% after the specialty provider of offshore energy services saw its earnings plunge far further than already-pessimistic investors had expected. Helix posted earnings per share of just $0.08, down 80% from year-ago levels on a decrease in revenue of almost 9%. The company's fourth quarter is typically a slow period, but Helix also had to deal with an accident that led to downtime for its Q4000 vessel. Helix touted record full-year results for its Well Intervention and Robotics segments, but sequential sales drops of around 40% compared to the third quarter for both of the divisions suggest the huge impact that falling oil prices have had on the services arena.
Gulfmark dropped 12% even though its quarterly report featured earnings that actually cleared the bar of what most investors had expected. Adjusted earnings of $0.17 per share were a penny higher than consensus estimates, and the offshore company's revenue also topped what the company had previously projected. Yet expectations for 2015 sales of $350 million to $400 million were far below what those following the company had looked for, and with day-rates expected to drop by 15% to 20%, Gulfmark clearly doesn't see any quick improvement in the industry in the near-term.
Finally, Vanguard Natural Resources dropped almost 6% as the oil and gas exploration and production company announced earnings results that fell short of expectations and slashed its monthly dividend by 44%. Due to the drop in oil and natural gas prices, Vanguard expects that its distributable cash flow will fall by a third in 2015 and remain at those depressed levels at least through 2016. At the same time, Vanguard said that it had implemented new hedging strategies to try to protect against any further downside, further emphasizing the company's belief that any rebound in energy prices will prove short-lived. Vanguard said that it was talking with some of the banks that provide credit to the company and that it expects that it will be able to have debt covenants changed in order to give Vanguard more financial flexibility in light of its gloomy guidance, but nevertheless, Vanguard investors will have to keep a close eye on the company going forward.