Stone Energy Earnings Preview

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Investors never know what to expect for Stone Energy (NYS: SGY) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings Tuesday. Stone Energy is an independent oil and natural gas company engaged in the acquisition and subsequent exploration, development, and operation of oil and gas properties located in the Gulf of Mexico.

What analysts say:

  • Buy, sell, or hold?: Analysts generally think investors should hang on to Stone Energy, with half rating the stock a hold. Analysts like Stone Energy better than competitor W&T Offshore overall. One out of 12 analysts rate W&T Offshore a buy compared with four of eight for Stone Energy. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.
  • Revenue forecasts: On average, analysts predict $211.3 million in revenue this quarter. That would represent a rise of 27.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.87 per share. Estimates range from $0.60 to $1.07.

What our community says:
CAPS All-Stars are solidly backing the stock with 95.3% giving it an "outperform" rating. The community at large agrees with the All-Stars with 93.9% granting it a rating of "outperform." Fools have embraced Stone Energy and haven't been shy with their opinions lately, logging 130 posts in the past 30 days. Even with a robust four out of five stars, Stone Energy's CAPS rating falls a little short of the community's upbeat outlook.

Management:
The company upped its gross margin by 3.4 percentage points in the last quarter. Revenue rose 20.8% while cost of sales rose 4.2% to $42 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

78.8%

75.9%

73.0%

75.0%

Operating Margin

32.3%

20.1%

22.6%

27.2%

Net Margin

20.1%

12.0%

13.2%

17.7%

One final thing: If you want to keep tabs on Stone Energy movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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