Boston, MA 03/17/2014 (wallstreetpr) – Callon Petroleum Company (NYSE:CPE) is involved in the business of exploration, acquisition and production of oil and gas properties. The company reported its fourth quarter results Wednesday last week of which results were mixed, but generally seemed encouraging.
Shares were up 7.76 percent to $8.61 Friday. That was another day of big gains on the stock following the favorable earnings results. The day saw large volume trading and shares changed hands between $8.12 low and $8.70 high on the day, setting a new 52-week. The shares traded between $3.19 and $8.70 in the past year.
Earnings performance
Callon Petroleum Company (NYSE:CPE) reported net income of $1.3 million or 3 cents per share for the fourth quarter. The earnings in the quarter were better than the 4 cent loss that the company suffered in a corresponding quarter a year earlier. The latest earnings were obtained on the back of $26.5 million revenue. There was 8 percent drop in revenue year-over-year due to sale of some offshore fields.
The fourth quarter results were in-line with what analysts estimated, thus investors seemed convinced that the management was executing well. For the current year, analysts estimate that the company will report profit of 28 cents.
Analyst sentiments
Callon Petroleum Company (NYSE:CPE) is witnessing price estimates and rating revisions from a number of analysts. Equity research experts at Sterne Agee hoisted their price target on the stock to $10 from $7.50. The new price target reflects about 16 percent upside potential from the current price.
The stock carries a “sector perform” rating from Howard Weil and “neutral” rating from SunTrust. It is worth noting that SunTrust is the latest rating agency to downgrade CPE.
On average, with about 10 brokerages having recently issued their sentiments on Callon Petroleum Company (NYSE:CPE), the stock has consensus “hold” recommendation and average price target of $7.69.
Investor Takeaway
While 2014 is fast-shaping up as potentially rewarding year for oil and gas companies, Callon Petroleum Company (NYSE:CPE) has the challenge of growing production to meet anticipated levels. This may impact revenue and bottom line figures. But the management has room to offset that challenge with more expense and cost reductions.
