Why Comstock Resources Stock Sunk 13% at the Open Today
Shares of U.S. oil and natural gas driller Comstock Resources (NYSE: CRK) fell sharply out of the gate on Nov. 5, dropping just shy of 13% in the first few minutes of trading. Although they quickly gained back some of that ground, the shares remained lower by around 7% at 10 a.m. EST. The company's after-market earnings release on Nov. 4 was the main driver here.
The energy sector, particularly in the United States, is deeply out of favor today. The severe drop in demand that resulted from the economic shutdowns used to slow the spread of COVID-19 have caused a massive supply-demand imbalance. Oil and gas prices have been weak for months. And that is showing up in the earnings of companies like Comstock. In the third quarter, it lost $0.57 per share, versus a loss of just a penny a share in the same period of 2019. Adjusted net income came in at a loss of $0.06 per share compared with a profit of $0.17 in the same stanza of 2019. Production was actually higher year over year in the quarter, so the weak performance was largely driven by a 14% drop in the company's realized selling price for natural gas and a nasty 35% decline on the oil side. No wonder investors were downbeat.
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Source Fool.com
