Goodrich shares down on 3Q loss

Associated Press

LOS ANGELES (AP) — Shares of Goodrich Petroleum Corp. declined sharply on Wednesday after it reported an adjusted loss in the third quarter worse than what analysts were expecting.

THE SPARK: Goodrich said after the market closed Tuesday that its net income in the three months to Sept. 30 declined 10 percent to $10.9 million, or 30 cents per share, from $12.1 million, or 33 cents per share, a year ago.

Excluding an asset sale gain and unrealized losses on derivatives, the company suffered an adjusted loss of 23 cents per share, worse than the 5-cent loss expected, on average, by analysts polled by FactSet.

Revenue fell 17 percent to $46.0 million, also worse than the $65 million that analysts were looking for.

Natural gas production fell as the company invested more in oil.

THE BIG PICTURE: Houston-based Goodrich is an oil and natural gas company that explores, develops and produces the fuels in Louisiana and Texas.

A glut of natural gas sent prices to their lowest point in a decade earlier this year. Prices have risen in recent months but they are still too low for most drillers to earn a profit from drilling new wells.

THE ANALYSIS: Stifel Nicholas analyst Michael Scialla noted that the company said production at its Tuscaloosa Marine Shale wells is delayed by needed repairs, and the company lowered its oil production guidance by 10 percent following the recent sale of a field. He reduced his production forecasts accordingly, but kept a "Buy" rating on the stock with a $24 price target.

SHARE ACTION: Goodrich shares fell $1.51, or 12.7 percent, to $10.39 in afternoon trading Wednesday. Earlier, the stock hit $9.93, a 52-week low. The high for the previous 52 weeks was $20.67, which it reached in March.