SM Energy Increases Sales but Misses Revenue Estimate

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SM Energy (NYS: SM) reported earnings on May 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), SM Energy missed estimates on revenues and missed estimates on earnings per share.

Compared with the prior-year quarter, revenue grew significantly and GAAP earnings per share increased.


Margins expanded across the board.

Revenue details
SM Energy recorded revenue of $377.4 million. The 11 analysts polled by S&P Capital IQ predicted revenue of $395.6 million on the same basis. GAAP reported sales were 29% higher than the prior-year quarter's $291.8 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.48. The 18 earnings estimates compiled by S&P Capital IQ anticipated $0.53 per share. GAAP EPS were $0.39 for Q1 against -$0.29 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 73.9%, 330 basis points better than the prior-year quarter. Operating margin was 15.9%, 2,640 basis points better than the prior-year quarter. Net margin was 7.0%, 1,330 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $414.0 million. On the bottom line, the average EPS estimate is $0.58.

Next year's average estimate for revenue is $1.76 billion. The average EPS estimate is $2.64.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 291 members out of 310 rating the stock outperform, and 19 members rating it underperform. Among 64 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 60 give SM Energy a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SM Energy is outperform, with an average price target of $96.92.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings. He is the co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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