Penn Virginia Earnings Preview

Motley Fool Staff
Updated

Investors hope Penn Virginia (NYS: PVA) will top analyst estimates once again after beating predictions by $0.01 in the previous quarter. The company will unveil its latest earnings on Wednesday, Nov. 2. Penn Virginia is engaged in the development, 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?: The majority of analysts back Penn Virginia as a buy. But with 60% of analysts rating it a buy, Penn Virginia is still below the mean analyst rating of its nearest 10 competitors, which average 64.5% buys. Analysts don't like Penn Virginia as much as competitor RAM Energy Resources overall. Two out of three analysts rate RAM Energy Resources a buy compared to six of 10 for Penn Virginia. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.

  • Revenue forecasts: On average, analysts predict $83.8 million in revenue this quarter. That would represent a rise of 76.5% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.21 per share. Estimates range from a loss of $0.30 to a loss of $0.11.

What our community says:
CAPS All-Stars are solidly behind the stock with 98.6% assigning it an "outperform" rating. The community at large agrees with the All-Stars with 91% awarding it a rating of "outperform." Fools are gung-ho about Penn Virginia, though the message boards have been quiet lately with only 47 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:
The company's gross margin shrank by 9.2 percentage points in the last quarter. Revenue rose 38.5% while cost of sales rose 69.4% to $37.3 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.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

49.4%

27.7%

58.1%

41.4%

Operating Margin

(109.6%)

(42.1%)

(40.4%)

(77.3%)

Net Margin

(97.7%)

(38.9%)

(37.1%)

(43.9%)

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

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At the time thisarticle was published

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