Why Did Cimarex Energy’s Stock Price Fall after Its 4Q15 Earnings?



Cimarex Energy’s stock price action 

Cimarex Energy (XEC) announced its 4Q15 earnings on February 16, 2016, after the market closed. On the day of the earnings, its stock price fell by 0.46%. It closed at $84.28.

In the after hours price action, Cimarex Energy’s stock price traded as high as $84.85 before trading closed.

In the two weeks leading to the earnings, Cimarex Energy’s stock price fell by ~9%. This was mainly due to the ~15% decline in crude oil prices during the same period.

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Stock price in downtrend

Declining crude oil and natural gas prices over the past year are dragging the entire upstream sector in a downtrend. As you can see in the above chart, Cimarex Energy’s stock price is also in a downtrend. It’s making a clear pattern of lower highs and lower lows.

2015 relative performance

For 2015, Cimarex Energy underperformed the S&P 500 ETF (SPY) because it lost ~16%. SPY was almost flat during the same period. Other oil and gas producers like Occidental Petroleum (OXY), Pioneer Natural Resources (PXD), and EOG Resources (EOG) fell ~13%, ~16%, and ~23%, respectively.

Stock price performance after past earnings misses

In the past year, there was only one occasion when Cimarex Energy missed the earnings expectations. It missed the earnings expectations in 3Q15.

Cimarex Energy reported its 3Q15 earnings after the market closed on November 3, 2015. In 3Q15, excluding one-time items, Cimarex Energy reported a loss of $0.15 per share. This was $0.07 lower than analysts’ estimates for a loss of $0.08 per share. Following the earnings release, the worse-than-expected earnings saw Cimarex Energy’s stock price fall by ~7% in eight sessions.


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