What: Shares of offshore driller W&T Offshore, Inc. (NYSE:WTI) jumped as much as 13% Thursday after the company released earnings.
So what: Revenue dropped 46% to $126.2 million and the company reported a net loss of $477.6 million after writing down $441.7 million in assets during the quarter. If you pull out items like the writedown and a derivative gain, the loss was $62.1 million, or $0.82 per share, which was lower than the $0.96 per-share loss Wall Street expected. That's the reason the stock is up.
Now what: Earnings being "less bad" than expected doesn't make a company like W&T Offshore a good stock, and investors buying today are gambling more than anything else. Consider that the GAAP loss of $6.29 per share reported for the third quarter is nearly double the stock price, and losses aren't expected to stop anytime soon.
Better-than-expected results can be good for investors, but in this case I think the pop will be short-lived because W&T has a lot of challenges ahead just trying to get back to breakeven.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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