Roundly criticized for its murky bookkeeping, El Paso ( EP) began a new era of "full disclosure" Thursday by revealing some news investors didn't want to hear. The Houston-based energy company managed to meet second-quarter earnings expectations but slashed its 2002 and 2003 guidance by 20% and 33% respectively. The company also scaled back its full-year trading profit forecast, to $150 million from $400 million. The revisions came after the company promised a much stronger performance in May. El Paso's darkened outlook caused an immediate selloff that pushed the stock down 13% to a morning low of $12.80 a share. But investors, cheered by an upbeat conference call, quickly digested the new guidance and sent the stock past its opening price to $14.89. "We weren't expecting that kind of hit," said John Olson, an analyst at Sanders Morris Harris and longtime El Paso stockholder. "El Paso looked very smart downsizing its marketing and trading operations before anyone else did. But apparently, that was not enough." Even after that gain, which pushed the stock up 14 cents on the day, Olson said El Paso continues to trade for far less than the $22.50 to $23 it is worth. The company agreed, while attempting to differentiate itself from its beleaguered peers. "We turned in a solid second quarter," said El Paso Chief Executive William Wise. "Our core businesses performed quite well."