What happened
Shares of Berry(NASDAQ: BRY) were trading 14.3% higher as of 12:22 p.m. ET Wednesday after the company reported fourth-quarter results before the opening bell that trounced analysts' expectations.
The independent upstream energy company, which focuses on the San Joaquin Basin of California and the Uinta Basin of Utah, reported revenue of $194.7 million, handily exceeding Wall Street's consensus estimate of $187.9 million, while adjusted profits of $0.94 per share blew away estimates of only $0.22 per share.
Image source: Getty Images.
So what
While Berry beat analysts' expectations, its revenue was actually 4% below its year-ago result of $203.6 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also fell year over year, coming in at $78 million for the quarter compared to $97 million in the prior-year period.
The primary reason for the revenue decline was lower energy costs. Realized oil prices were $73.39 per barrel for the period, down from $76.41 in the third quarter. Excluding hedging effects, the price was $81.66 per barrel. The company's production in California -- which accounts for 82% of its total -- rose 1% during the period to 21,100 million barrels of oil equivalent per day.
Now what
Management said the improved financial picture would allow it to increase the value it returned to shareholders. The energy company said it was increasing its stock buyback authorization to $200 million and doubling its fixed dividend to $0.48 per share starting with the first quarter of 2023.
10 stocks we like better than Berry
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Berry wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of February 8, 2023
Rich Duprey 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.
