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How WPX Energy’s Stock Price Reacted after Past Earnings Misses

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Aug. 10 2016, Updated 11:04 a.m. ET

WPX Energy’s stock price action following 2Q16 earnings

WPX Energy (WPX) announced its 2Q16 earnings on August 3, 2016, after the Market closed. After its 2Q16 earnings were announced, WPX Energy’s stock price increased by ~2% in the single trading session.

In the last three months leading into the earnings, WPX Energy’s stock price has increased by ~13%, despite an ~7% decrease in crude oil (USO) (UWTI) (DWTI) prices during the same period.

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WPX Energy’s stock price trend change

After losing ~91% of its market capitalization from September 2014 to January 2016, WPX Energy’s stock price is finally showing signs of new uptrend. In April 2016, WPX Energy’s stock crossed the 200-day moving average for the first time in the last 18 months and is currently trading ~31% above it.

Since its January 2016 bottom, WPX Energy’s stock price is up by a whopping ~284%.

WPX’s 2016 relative performance

For 2016, WPX is outperforming bigger upstream companies from the S&P 500 (SPY). For 2016, WPX is up by ~69%, whereas larger oil and gas producers Devon Energy (DVN), Occidental Petroleum (OXY), and EOG Resources (EOG) are up by ~22%, ~12%, and ~20%, respectively.

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WPX’s stock price behavior after past earnings misses

In the last six quarters, there were four occasions (1Q16, 4Q15, 3Q15, and 2Q15) earnings when WPX Energy missed the earnings expectations.

WPX Energy reported its 1Q16 earnings after the Market closed on May 4, 2016. In 1Q16, excluding the one-time items, WPX Energy reported a loss of $0.21 per share, $0.02 worse than the consensus for a loss of $0.19 per share. Following the earnings release, worse-than-expected earnings saw WPX Energy’s stock price decrease by ~5% in these three sessions.

WPX reported its 4Q15 earnings after the Market closed on February 24, 2016. In 4Q15, excluding the one-time items, WPX reported a loss of $0.24 per share, $0.05 lower than its consensus for a loss of $0.19 per share. Following the earnings release, lower-than-expected earnings saw WPX Energy’s stock price increase by ~53% in the eight sessions.

A similar contrarian reaction was observed after its 3Q15 and 2Q15 earnings also, when WPX Energy’s stock price increased by ~17% and ~21%, respectively, in two sessions and five sessions. This occurred even after missing the consensus earnings estimates by $0.04 per share and $0.01 per share, respectively.

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