What: Shares of SM Energy Co jumped as much as 14% today after the company reported better-than-expected earnings.
So what: SM Energy's production jumped 23% to 16.5 million barrels of oil equivalent (BOE) and exceeded the company's operating plan. Growing production and lower lease costs resulted in adjusted net income of $33.2 million, or $0.49 per share, crushing the penny loss analysts had expected.
Now what: While adjusted earnings exceeded expectations, it's worth noting that GAAP net loss was $57.5 million, or $0.85 per share, so operations aren't profitable without a number of adjustments the company is making. That's worth noting because operating profit per BOE fell 58% from a year ago to $13.65 and could fall further now that oil is below $50 per barrel. Operational improvements are nice, but this is still a stock that's tied to the price of oil long-term.
The article Why Shares of SM Energy Co Popped 14% Today originally appeared on Fool.com.
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