Why Equinor Stock Sank Today

Investors were hardly energetic about Norwegian energy company Equinor (NYSE: EQNR) on Wednesday. They traded out of the stock to the point where it lost more than 5% of its value. The sell-off came on the heels of the company's latest earnings release. Other stocks fared better, as the S&P 500 index closed in positive territory with a nearly 0.4% rise.

Top- and bottom-line slumps

Equinor, which reports in U.S. dollars, saw its fourth-quarter revenue dip by 5% year over year to $27.65 billion. Non-GAAP (adjusted) net income also sagged, declining at a 6% pace to $1.7 billion ($0.63 per share).

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Analysts tracking the oil and gas company were expecting it to be significantly more profitable in the period. They were collectively modeling an adjusted net profit of $0.82 per share. On the plus side, Equinor handily beat their $25.57 billion revenue estimate.

The quarter was marked by single-digit declines in liquid and gas production. It also featured an 11% slide in the average Brent oil crude price. In the financial supplement of its earnings release, Equinor wrote that divestments of assets in Africa and Central Asia contributed to a fall in exploration and production in the company's international operations.

High expectations

Equinor also proffered very selected guidance for the entirety of 2025. The company is estimating that organic capital expenditures will come in at $13 billion for the year, while oil and gas production should grow by 4% from the 2024 level.

In recent times the oil and gas industry was booming, so to an extent investors have become somewhat accustomed to over-performance. Equinor is still well in the black on the bottom line, though, and the future of the industry looks bright, so perhaps the share-price dip is an opportunity to buy the stock relatively cheaply.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Equinor Asa. The Motley Fool has a disclosure policy.