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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.
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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.
The article Earnings and Outlook are Fueling Seventy Seven Energy Incs Stock Today originally appeared on Fool.com.
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