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.
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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%.
