Forest Oil Corp. Earnings: Revenue Off the Mark

Forest Oil Corporation (NYSE:FST) reported its results for the second quarter. Forest Oil is an independent oil and gas company engaged in the acquisition, exploration, development, and production of natural gas and liquids mainly North America.

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Forest Oil Corporation Earnings Cheat Sheet

Results: Reported a loss of $511 million ($4.44 per diluted share) in the quarter. Forest Oil Corporation had a net income of $38.9 million or 34 cents per share in the year-earlier quarter.

Revenue: Fell 27.4% to $135.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Forest Oil Corporation reported adjusted net income of 6 cents per share. By that measure, the company fell in line with the mean estimate of 6 cents per share. It fell short of the average revenue estimate of $187.7 million.

Quoting Management: Patrick R. McDonald, Interim CEO, stated, “The second quarter represented an operational and strategic realignment of priorities at Forest. We have increased focus on our oil projects, and we saw good results during the quarter from the Hogshooter and Cleveland oil plays in the Panhandle Area and from our Eagle Ford program. These high-quality assets form the foundation of our core oil portfolio. “Strategically we are committed and have taken the first step to improve our financial strength by adjusting our second half capital program to be near projected cash flow. With our remaining 2012 capital budget mainly targeting higher-margin oil opportunities, we expect to deliver second half oil volume growth that is 10-15% higher than the first half of the year. We have reduced spending in, and will have lower production from, lower-return liquids and natural gas projects.

Key Stats:

After missing the mark in the previous two quarters, the company met analyst estimates. In the first quarter, it fell short by 9 cents, and in the fourth quarter of the last fiscal year, it was under-estimate by 8 cents.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is 9 cents per share, down from 24 cents ninety days ago. At 37 cents per share, the average estimate for the fiscal year has fallen from 90 cents ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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