Concho Resources’ Stock Up despite Lower-than-Expected Earnings

Concho Resources Up Despite Lower-than-Expected Earnings

(Continued from Prior Part)

Concho Resources’ stock performance

Following Concho Resources’ (CXO) 1Q16 earnings release on May 4, 2016, its stock rose by ~5% the next day, May 5. CXO’s stock has fallen by ~3% YoY (year-over-year).

In comparison, Resources’ peers EP Energy (EPE), Cimarex Energy (XEC), and Newfield Exploration (NFX) have fallen by 60%, ~4.6%, and 1.2%, respectively, on a YoY basis. NFX, CXO, and XEC make up 6.7% of the iShares US Oil & Gas Exploration & Production ETF (IEO).

In the above chart, we can see CXO’s stock performance with respect to movements in the broader industry and the broader market.

From April 21–May 5, 2016, CXO outperformed the broader energy industry (XLE), which fell by 1% during this period. CXO increased by ~4.4% during the same period. CXO also outperformed the broader market (SPY), which fell by ~1.9% during the period.

In the above graph, it’s clear that CXO’s performance has been driven mostly by natural gas prices (UNG) and WTI (West Texas Intermediate) crude oil prices (USO). These have also been a major driver for XLE.

Following CXO’s 1Q16 earnings release on May 4, its stock increased the next day, despite lower-than-expected earnings. A 1.4% increase in crude oil prices likely led to the increase. Please refer to Part 1 to see how CXO performed in 1Q16.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Concho Resources’ 1Q16 Earnings Were Lower than Expected

• Part 2 - Concho Resources’ 1Q16 Operational Highlights

• Part 4 - Analysts’ Recommendations for CXO after Its 1Q16 Results