By most accounts, energy stock Helix Energy Solutions (NASDAQ:HLX) should have done better than it did today. It put up a solid earnings report that featured beats all around. Despite this, however, it still lost over 8% in Tuesday’s trading. It turns out that the earnings report had an Achilles’ heel that, when pierced, sent the whole thing plunging.
Granted, the earnings report wasn’t all smiles and sunshine. It posted earnings per share of -$0.03 per share. That was only good news because analysts were expecting -$0.04. Revenue, however, fared much better, coming in at $250.08 million and beating projections of $236.28 million.
The loss was a problem, though not the only one. The most significant problem was the revelation that Helix Energy went cash flow negative in the quarter. Helix reported free cash flow of -$11.7 million. That’s down substantially against the fourth quarter of 2022, where it was at $21.2 million. However, it’s better than it was a year prior when it was -$18 million. That suggests a possible seasonal issue since the two negatives came at the same time over two years.
Analysts, however, are solidly on Helix Energy’s side with four Buy ratings, making it a Strong Buy. Further, HLX stock’s average price target of $12 gives it an upside potential of 66.44%.