What: Shares of offshore driller W&T Offshore, Inc. (WTI 2.32%) 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.
