First Solar soars, Devon weighs on gas stocks

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By Jim Jelter, MarketWatch

SAN FRANCISCO (MarketWatch) — Oil and oil-field-services stocks closed with slim gains Wednesday on the back of stronger oil prices, dodging a shallow but widespread sell-off in equities following a downbeat assessment of the U.S. economy by the Federal Reserve.

The biggest move of the day came after the close, however, on a surprisingly strong second-quarter report from First Solar Inc.

First Solar Inc. FSLR -4.76% shares surged as much a 16% in after-market trades after the company reported earnings of $1.27 a share, trouncing the 97 cents a share analysts were looking for.

The report marked a welcome turnaround from steep losses in the previous quarter and a big improvement of its year-ago earnings of 70 cents a share. Read about First Solar's surprise earnings.

The Tempe, Ariz., solar-power company, which had seen its share price tumble nearly 90% over the past year, also raised its full-year earnings and sales estimates.

Meanwhile, the NYSE Arca Oil and Gas Index XX:XOI +0.58% ended the session 0.6% higher at 1,203.74 points, reversing the previous session’s decline.

Firmer oil prices lent support to the sector. September crude-oil futures, reflecting an unexpected drop in the latest U.S. weekly inventory reports, rose 85 cents to settle at $88.91 a barrel in New York. See the latest on oil futures.

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The NYSE Arca Natural Gas IndexXX:XNG -0.35% slipped 0.3% to 644.23 points, with Devon Energy among the group’s biggest decliners.

Devon Energy Corp. DVN -3.48% shares fell 3.5% to $57.06 after the gas producer said it is selling 30% of its holdings in Cline Shale and Midland-Wolfcamp Shale to Japan’s Sumitomo Corp. The deal, valued at $1.4 billion, aims to help Devon cover its drilling costs.

Devon also reported a second-quarter profit of $477 million, or $1.18 a share. Adjusted to exclude the impact of its derivatives trades, the company earned 55 cents a share, less than the 81 cents a share analysts had been looking for. Read about Devon's latest quarter.

Marathon Oil Corp. MRO +0.19% also released its second-quarter results, posting a 61% lower profit of 56 cents a share. It’s adjusted earnings were 59 cents a share, matching analysts’ expectations. The weaker results reflected lower oil and gas prices in the quarter. See Marathon's latest results.

Marathon Oil shares rose 5 cents, or 0.2%, to $26.52.

The Philadelphia Oil Service Sector Index OSX +0.99% rose 1% to 218.79 points. Oceaneering International Inc. OII +2.55%  led percentage gainers in the group on a 2.6% advance to $53.01 a share. 

Jim Jelter is Industrials Editor for MarketWatch in San Francisco.