WASHINGTON (AP) — Shares of QEP Resources Inc. sank Wednesday after the company reported disappointing earnings and forecast lower-than-expected gas production next year.
THE SPARK: QEP reported Tuesday that it swung to a third quarter loss of $3.1 million, as revenue fell more than 38 percent from the prior-year period. The company reported adjusted earnings per share of 19 cents, well below Wall Street's consensus of 34 cents per share.
THE ANALYSIS: Raymond James analyst Andrew Coleman lowered his rating on shares of the oil and gas producer Wednesday to "market perform" from "outperform." He noted that the company expects "below average" gas production next year of roughly 3 percent. The company is also more highly leveraged than its peers, according to Coleman. QEP has been working to shift its business away from natural gas toward oil.
QEP said in August that it would spend $1.38 billion to buy oil-producing land in North Dakota. Natural gas has been abundant, so prices have sagged, prompting gas-heavy companies like QEP to look for ways to get in on the oil boom.
SHARE ACTION: Down $2.12, or 6.7 percent, to $29.36 in midday trading Wednesday. They are still 21 percent above their 52-week low of $24.35 in late June.