NEW YORK (TheStreet) -- EP Energy (EPE) - Get Report stock is soaring by 20.18% to $5.30 on heavy trading volume this afternoon, following the release of 2016 first quarter earnings that topped analysts' projections.
After yesterday's market close, the oil and gas exploration and production company reported adjusted earnings of 19 cents per share. Analysts expected that EP Energy would break even for the quarter.
The company made "good progress" on its top priorities to improve liquidity and reduce leverage, generating $122 million of free cash flow during the most recent period," CEO Brent Smolik said in a statement.
Additionally, the company closed the sale of its Haynesville asset, which increased liquidity by roughly $250 million, Smolik noted.
EP Energy repurchased $609 million principal amount of debt for $287 million and reached an agreement with its banks to reset its borrowing base at $1.65 billion, with improved covenant flexibility through early 2018.
The company expects to cut its annualized interest expense by roughly $50 million as a result of the debt repurchases and retirement.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D-.
EP Energy's weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: EPE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.