Exterran Holdings Earnings Preview

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While Exterran Holdings (NYS: EXH) missed estimates last quarter, investors hope that it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings on Monday, Feb. 20. Exterran Holdings is engaged in the full service natural gas compression business and a premier provider of operations, maintenance, service, and equipment for oil and natural gas production, processing, and transportation applications.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Exterran Holdings with five of seven analysts rating it hold. Analysts don't like Exterran Holdings as much as competitor TETRA Technologies overall. Four out of eight analysts rate TETRA Technologies a buy compared to two of seven for Exterran Holdings. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $634.9 million in revenue this quarter. That would represent a rise of 3.1% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is a loss of $0.47 per share. Estimates range from a loss of $0.56 to a loss of $0.35.

What our community says:
CAPS All-Stars are solidly behind the stock, with 94.4% granting it an "outperform" rating. The greater community is in line with the All-Stars, as 91.2% give it a rating of "outperform." Fools are gung-ho about Exterran Holdings, though the message boards have been quiet lately with only 26 posts in the past 30 days. Exterran Holdings' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Revenue has now gone up for three straight quarters. The company's gross margin shrank by 4.3 percentage points in the last quarter. Revenue rose 12.6% while cost of sales rose 19.6% to $515.1 million from a year earlier.

Now let's get some insight into how efficient management is at running the business. Margins illustrate how efficiently a company captures portions of sales dollars. Exterran Holdings' operating margins have been decreasing year-over-year for the last four quarters. Operating margins reflect the total sales revenue that the company retains after costs. Here are Exterran Holdings' reported margins for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

26.9%

26.8%

29.9%

30.8%

Operating Margin

(35.0%)

(6.9%)

(5.5%)

(9.5%)

Net Margin

(30.7%)

(4.3%)

(4.9%)

(19.2%)

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At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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