Why Encana (ECA) Stock Is Gaining Before the Bell

NEW YORK (TheStreet) -- Encana (ECA) stock is moving higher before market open following a positive earnings report driven by higher gas prices and liquid production. In premarket trading, shares had popped 3.6% to $23.37. 

Over its first quarter ending March, the oil and gas company reported earnings of $515 million, or 70 cents a share, a 192% year-over-year increase. Analysts surveyed by Thomson Reuters had expected net income of 55 cents a share. 

"While first-quarter financial results were bolstered by improved NYMEX natural gas prices that were up 37% compared to the fourth quarter of 2013, the company also benefited from higher wellhead realizations relative to local benchmark prices," the company said in a statement. 

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TheStreet Ratings team rates ENCANA CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ENCANA CORP (ECA) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and generally higher debt management risk."

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