Earnings and Outlook are Fueling Seventy Seven Energy Inc’s Stock Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Seventy Seven Energy Inc jumped double-digits when the market opened this morning as investors breathed a sigh of relief after seeing its first-quarter results. Not only were those results not quite as awful as feared, but the company's outlook also provided a bit of relief.

So what: That being said, for the glass half empty types the quarter was pretty abysmal. Revenue was $429.8 million, which was down 13% from last quarter and down 6% from adjusted revenue in last year's first quarter. In addition to that the company didn't make any money as it reported a loss of $37.6 million, or $0.78 per share. Even after adjusting for one-time items including losses on the sales of property and equipment as well as severance costs the company still turned in an adjusted loss of $21.6 million, $0.45 per share.

Clearly, the company is facing some challenging headwinds. However, glass half full types can take comfort in the fact that those results were not quite as atrocious as investors had been fearing. Further, the company expects that the U.S. rig count will find a bottom in the near term. Finally, the company has plans to bolster its liquidity as it is exercising the $100 million accordion feature on its term loan. That liquidity boost puts the company in a position to take advantage of opportunities to enhance shareholder value.

Now what: Seventy Seven Energy still has a tough hill to climb. Oil and gas drilling activity will likely remain muted for the balance of the year and it will likely be quite some time before drilling activity reaches its former peak. However, the company is working to keep its costs down so that it can survive the downturn and be in the position to take advantages of opportunities that arise in the future.

This $19 trillion industry could destroy the Internet

One bleeding-edge technology is about to put the World Wide Web to bed. And if you act quickly, you could be among the savvy investors who enjoy the profits from this stunning change. Experts are calling it the single largest business opportunity in the history of capitalism... The Economist is calling it "transformative"... But you'll probably just call it "how I made my millions." Don't be too late to the party -- click here for one stock to own when the Web goes dark.

The article Earnings and Outlook are Fueling Seventy Seven Energy Inc's Stock Today originally appeared on

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More