Spectra Energy Misses on the Top and Bottom Lines

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Spectra Energy (NYS: SE) reported earnings on May 9. Here are the numbers you need to know.

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

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped.


Gross margins increased, operating margins dropped, net margins contracted.

Revenue details
Spectra Energy reported revenue of $1.54 billion. The five analysts polled by S&P Capital IQ anticipated revenue of $1.62 billion on the same basis. GAAP reported sales were 4.2% lower than the prior-year quarter's $1.61 billion.

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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 $0.51. The 12 earnings estimates compiled by S&P Capital IQ averaged $0.52 per share. GAAP EPS of $0.51 for Q1 were 7.3% lower than the prior-year quarter's $0.55 per share. (The prior-year quarter included $0.01 per share in earnings from discontinued operations.)

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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 51.2%, 80 basis points better than the prior-year quarter. Operating margin was 33.5%, 80 basis points worse than the prior-year quarter. Net margin was 21.6%, 50 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.20 billion. On the bottom line, the average EPS estimate is $0.42.

Next year's average estimate for revenue is $5.62 billion. The average EPS estimate is $1.82.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 812 members out of 840 rating the stock outperform, and 28 members rating it underperform. Among 233 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 228 give Spectra Energy a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Spectra Energy is outperform, with an average price target of $33.33.

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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 here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Spectra Energy. 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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