Denbury Resources Inc. (NYSE:DNR) Stock Trading At One Year Low After Poor Quarterly Results


Denbury Resources Inc. (NYSE:DNR) reported a net quarterly loss of $2.24 billion in the third quarter. The revenue of the company at $303.6 million was also well short of the expected $454 million. The company is an energy company and is therefore dependent on the crude prices for its earnings, the low crude prices and bleak prospects for any large increase in crude prices are also behind the low earnings. The shares of the company declined after a disappointing quarterly result.

However the recent bombing of Russian Plane by Turks has caused an uptick in the crude prices due to expectations of oil shortage due to disruption of supply lines. This caused a brief rally on 24th November and the stock seems to have stabilized on at over $3.50-$3.70 bracket, this is still lower than the $4 price the stock commanded before the quarterly results were released.

The concerns over Syrian conflict and their effect on crude prices is seen as one of the main factors that can shape the future of crude and therefore that of Denbury, however according to some analysts there is still an oversupply of crude therefore any large increase in crude prices is unlikely.

There are various reports giving conflicting take on the stock, however the company has significantly underperformed even when compared to Oil & Fuels Industry and has posted a massive 935% drop in net income from $268.75 million same quarter a year ago to -2.24 billion this year. The stock has also tumbled by 69.53% over the last year, this has caused some of the analysts to call a hold or buy on the stock but barring some significant geopolitical event it is unlikely that crude prices will move up which is essentially tied to Denbury’s income, therefore the bad performance of Denbury Resources Inc. (NYSE:DNR) this past quarter can only be salvaged by an unforeseen event.