Energy Sector Update for 08/08/2017: CJ,DNR,PAA

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Energy stocks turned solidly lower this afternoon, giving back sizable gains from earlier trading today and the NYSE Energy Sector Index dropping almost 0.5%% while shares of energy companies in the S&P 500 also were down nearly 0.4% as a group. Crude oil for September delivery settled 22 cents lower at $49.17 per barrel, reversing course during afternoon trading. September natural gas futures rose 2 cents to $2.82 per 1 million BTU.

In company news, C&J Energy Services ( CJ ) struggled Tuesday afternoon, with shares of the oilfield services company dropping nearly 6% and establishing a $30.05 a share session low after this morning posting mixed Q2 results, enjoying a big jump in revenue compared with year-ago levels and topping Wall Street projections but also reporting a larger net loss than analysts were expecting.

The company produced a net loss of $0.20 per share during the three months ended June 30, improving on a $0.58 per share net loss during the same quarter last year but still coming in $0.06 per share wider than the consensus call of analysts polled by Capital IQ.

On a brighter note, revenue increased 73.3% over year-ago levels to $390.14 million, aided by a big boost in activity by the company's core completion services unit and beating the $372.29 million analyst mean.

The company said it expects completion services to keep experiencing "strong" customer demand through the end of the year while its hydraulic fracturing business remains fully booked well in 2018. It plans to add another horizontal frac fleet this month for a customer in western Texas along with a second fleet in southern Texas before the end of Q3.

In other sector news,

(+) DNR, Adjusted Q2 EPS of $0.00 tops Capital IQ consensus expecting a $0.02 per share net loss. Revenue rose 2.4% over year-ago levels to $261.2 mln, exceeding the $248.7 mln analyst mean.

(-) PAA, Downgrade to Neutral from Outperform at Robert W. Baird, which also pared its price target for the stock by $6 to $24 a share. Also, Stifel lowers its price target by $4 to $26 a share and reiterates its Hold rating.

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

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