Shale drillers gave investors a reality check after a strong start to the year, with Anadarko Petroleum Corp., Chesapeake Energy Corp., Devon Energy Corp. and Concho Resources Inc. all falling after disappointing earnings reports.Read on by clicking here.
Expectations were heightened with second-quarter oil prices 41 percent higher than a year earlier, and with most producers pledging to keep spending within cash flow. But for the most part they failed to deliver.
The result: Each slid in New York trading, with some losing 5 percent or more. While at least part of that drop was due to oil prices that hit a five-week low on Wednesday, analysts suggested investors were looking for more than the mixed-bag results that were reported.
“There were high expectations,” said Subash Chandra, a New York-based analyst at Guggenheim Securities LLC. “They either didn’t beat or raise their guidance, or if they did, it was offset by more spending.”
One big “red flag,” according to Chandra: Capital spending increases based on cost inflation, “when most of us thought inflation was already modeled in and settled.”
Connect with us on Facebook and Twitter!