Cimarex Energy Earnings Preview

Motley Fool Staff
Updated

Investors are braced for a bumpy ride ahead of Cimarex Energy's (NYS: XEC) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Thursday, August 4. Cimarex Energy is an independent oil and gas exploration and production company with operations entirely located in the United States.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Cimarex Energy, with 13 of 16 rating it a buy and the remainder rating it a hold. Analysts don't like Cimarex Energy as much as competitor Linn Energy overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.

  • Revenue forecasts: On average, analysts predict $443.8 million in revenue this quarter. That would represent a rise of 17.3% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.71 per share. Estimates range from $1.43 to $1.84.

What our community says:
CAPS All-Stars are solidly behind the stock, with 97.5% giving it an "outperform" rating. The community at large concurs with the All-Stars, with 96.1% awarding it a rating of "outperform." Fools are keen on Cimarex Energy and haven't been shy with their opinions lately, logging 165 posts in the past 30 days. Despite the majority sentiment in favor of Cimarex Energy, the stock has a middling CAPS rating of three out of five stars.

Management:
Cimarex Energy's profit has risen year over year by an average of more than twofold. A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases. The company's gross margin shrank by 4.6 percentage points in the last quarter. Revenue fell 4.9%, while cost of sales rose 28.2%.

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

82.1%

81.7%

81.6%

83.5%

Operating Margin

44.2%

46.5%

52.6%

52.7%

Net Margin

27.7%

28.8%

33.9%

32.9%

For all our Cimarex Energy-specific analysis, including earnings and beyond, add Cimarex Energy to My Watchlist.

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At the time thisarticle was published

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Originally published