Why Evolution Petroleum Stock Dived by 21% Today

What happened

Evolution Petroleum (EPM -20.90%) came up well short of analyst expectations with its latest earnings report, and investors punished the company for it. The oil and gas stock’s price took a nearly 21% hit on the day as a result, providing quite a contrast with the rising S&P 500 index, which closed 0.1% higher.

So what

Evolution published its fourth quarter and full-year results for fiscal 2023 after market hours on Tuesday. These showed that the energy company earned just under $18.2 million in revenue, which was a steep 57% lower on a year-over-year basis. Non-GAAP (adjusted) net income also fell sharply, plummeting to $166,000 ($0.00 per share) from Q4’s 2022 profit of $15.1 million. 

Neither headline fundamental came close to the consensus-prognosticator estimate. Pundits following Evolution stock were expecting the company to book $21.6 million on the top line, and net an adjusted profit of $0.06 per share.

Evolution quoted its CEO Kelly Lloyd as saying that the quarter “was impacted by much lower quarter over quarter price realizations and extended downtime and maintenance across multiple fields.”

The company also declared its latest quarterly dividend. This is to be $0.12 per share, matching the previous four payouts. It will be dispensed on Sept. 29 to investors of record as of Sept. 22. The yield on the dividend is 6.9%.

Now what

Outside of that unimpressive Q4, Evolution didn’t do badly at all during the year. For the entirety of fiscal 2023, it actually managed to grow its revenue by 18% over 2022 (to $128.5 million), while posting only a slight decline of 2% in adjusted net income to a shade under $34 million.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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