Penn Virginia Earnings Preview

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If Penn Virginia (NYS: PVA) misses estimates again, it will be the fourth consecutive quarter. The company will unveil its latest earnings on Wednesday, Aug. 3. Penn Virginia is engaged in the exploration, and production of natural gas and oil in various domestic onshore regions, including East Texas, the Mid-Continent, Appalachia, Mississippi, and the Gulf Coast.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Penn Virginia, with eight of 13 rating it a buy and the remainder rating it a hold. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to a moderate buy.
  • Revenue forecasts: On average, analysts predict $74 million in revenue this quarter. That would represent a rise of 90.7% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.27 per share. Estimates range from a loss of $0.36 to a loss of $0.18.

What our community says:
CAPS All-Stars are solidly behind the stock, with 98.6% granting it an "outperform" rating. The community at large concurs with the All-Stars, with 91.2% giving it a rating of "outperform." Fools have embraced Penn Virginia, though the message boards have been quiet lately, with only 45 posts in the past 30 days. Even with a robust four out of five stars, Penn Virginia's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Revenue has fallen for the past three quarters. The company's gross margin shrank by 13.5 percentage points in the last quarter. Revenue fell 73.5% while cost of sales fell 67.4% to $48.9 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.

QuarterQ1Q4Q3Q2
Gross Margin27.7%58.1%41.4%52.8%
Operating Margin(42.1%)(40.4%)(77.3%)(39.3%)
Net Margin(38.9%)(37.1%)(43.9%)58.5%
For all our Penn Virginia-specific analysis, including earnings and beyond, add Penn Virginia to My Watchlist.

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