Reuters reported the following news story on July 17, 2008, after Nexen Inc. released its results of operations for the second quarter of 2008.}

UPDATE 4 -Nexen profit inches up, shares plunge Thu Jul 17, 2008 4:57pm EDT By Scott Haggett

(Reuters) - Nexen Inc. (NXY.TO)'s quarterly profit rose a disappointing 3.3 percent as its one-time charges and trading losses nearly wiped out the benefits of record oil prices, the Canadian oil company said on Thursday, sending its shares down 11 percent.

Canada's No. 4 independent oil explorer and producer said its second-quarter oil production was nearly unchanged from the year-earlier quarter, to 254,000 barrels of oil equivalent a day before royalties. That reflected a two-day strike at a Scottish refinery that shut down a pipeline serving its massive Buzzard oil field in the North Sea.

Net income rose a scant 3.3 percent to \(C \$ 380\) million, or 70 Canadian cents a share, in the quarter, from \(\mathrm{C} \$ 368\) million, or 68 Canadian cents, for the same period last year. Revenue rose 48 percent to \(\mathrm{C} \$ 2.07\) billion.

The company also recorded a C \(\$ 240\) million after-tax charge for stock-based compensation, while poor trading results at its marketing arm cut cash flow by C \(\$ 164\) million as bets on natural gas price disparities went awry. "We were a little surprised,"" said Chris Feltin, an analyst

\begin{abstract}
at Tristone Capital. "We were caught offside by the larger-than-expected stock compensation charges and the marketing loss."
\end{abstract}
\(\cdots\)
Without the charge, earnings per share would have come in at \(C \$ 1.15\), below analysts' average operating profit estimate of \(C \$ 1.33\) a share, according to Reuters Estimates.
\(\cdots\)
Nexen shares fell \(C \$ 4.01\) or 11 percent, to \(C \$ 32.95\) on the after the release of its results. The shares have dropped 4.5 percent over the past 12 months. \((\$ 1=\$ 1.01\) Canadian) (Additional reporting by Scott Anderson; editing by Janet Guttsman)
Source: www.reuters.com/article/idUSN1726055820080717. Accessed February 4, 2010.
Required:
1. Identify the direction and amount of the change in earnings per share for the second quarter of 2008 compared with the same quarter of 2007.
2. Identify the direction and amount of the change in Nexen's share price after the release of the second-quarter results.
3. Explain why Nexen's share price changed in the opposite direction from the change in its earnings.