Bill Barrett Corporations Stock Plunges 12% After Reporting Huge Loss

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: Bill Barrett Corporation's stock is taking a dive today after the oil and natural gas producer's fourth-quarter results missed expectations. On an adjusted basis the company lost $11.3 million, or $0.23 per share, which was $0.18 per share more than Wall Street had expected.

So what: The company's larger than expected loss was partially due to downtime at a third-party facility. This downtime shaved off production of 1,000 barrels of oil equivalent per day, or BOE/d, from the company average, which reduced production to an exit rate of 15,600 BOE/d for the quarter. In addition, Bill Barrett's depreciation, depletion, and amortization expenses rose by 34% compared to 2013, largely due to the company's shift into oil production over the past year.

The company's light guidance for 2015 is also driving investors away from the stock. Bill Barrett only expects to grow production by 10% in 2015, down from 29% production growth over the past year.However, that is to be expected as the company's capital expenditures will be slashed by more than 50%, from $569 million last year to between $240 million and $280 million in 2015.

Now what: Like its peers, Bill Barrett's fourth-quarter results were affected by the deep sell-off in the price of oil during the quarter. That sell-off is also having a noticeable impact on the company's growth plans -- it is curtailing spending as it waits for oil prices to improve. This move makes a lot of sense given that no one really knows when the oil market will improve.

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