El Paso ( EP) is trying out a new strategy.

The company, attacked for concealing too much information in the past, is exposing more of its problem areas. And the new disclosures aren't exactly flattering.

In an unusually blunt address to analysts Tuesday, El Paso shared some ugly details about its merchant energy division, its enormous debt load and its earnings outlook going forward. The company admitted that energy trading has hurt its bottom line more than expected, that its debt burden is roughly twice what it should be, and that promises for a break-even year will probably be broken.

The market -- clearly hungry for a frank update from the company -- showed it could stomach the news. El Paso shares, which tumbled nearly 6% to $7.21 ahead of Tuesday's earnings call, pushed into green territory after the call ended. The stock ended down 16 cents at $7.50.

Prudential analyst Carol Coale, who has remained surprisingly bullish on El Paso through its many missteps, was quick to compliment the company.

"You had a very thorough call," Coale said. "It looks like a better-than-expected quarter."

Now Back to Earth

In reality, the company actually fell a nickel short -- or 14% -- of delivering expected operating profits of 29 cents a share. It also scaled back its full-year earnings guidance from $1 to the 87 cents Wall Street was already expecting. It blamed the downward revision on unexpectedly high trading losses, which could threaten even its newly lowered guidance.

Overall, El Paso expects to wind up with a net loss for the year. The company, which projected a break-even year just six weeks ago, said it now plans to sell additional "noncore" assets -- including a refinery in Aruba and a telecommunications network in its home state of Texas -- that will trigger big impairment charges and push full-year results into the red. The company said it must take aggressive steps now if it hopes to bring its onerous debt load, totaling more than $25 billion, under control.

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