Encana Corp., the Canadian natural gas producer switching its focus to oil, fell to a 13-year low after second-quarter earnings missed analysts’ estimates.

Encana fell 8.7 per cent to $10.25 at 10:31 a.m. in Toronto, after earlier dropping 10 per cent to the lowest since July 2002. The company said it cut about 200 jobs in the past month.

The additional job cuts signal the worst isn’t over for energy workers in a market slump that has U.S. crude trading at less than half its 2014 high. Encana’s stock has come under more pressure than its peers because investors have been skeptical that the company will meet production targets, according to GMP Securities LP.

“We believe investors will be disappointed with the results,” Randy Ollenberger, an analyst at BMO Capital Markets in Calgary, wrote in a note Friday. Encana’s full-year production outlook looks unachievable and will probably be adjusted lower despite that the company has maintained the forecast, he said.

Excluding one-time items, the per-share operating loss of 20 cents missed the average loss of 13 cents expected by the average of 17 analysts’ estimates. The company reported a net loss of $1.6 billion, or $1.91 per share.

The company has eliminated 1,400 jobs, or about one-third of its workforce, since announcing a new strategy in late 2013, Chief Executive Officer Doug Suttles said on a conference call Friday. Almost 1,000 positions were initially cut when the business plan was outlined.

Source: business.financialpost.com

Please leave comments and feedback below