How the Wheels Came Off DCP Midstream Partners' Bus

Seth Jayson, The Motley Fool
Updated

DCP Midstream Partners (NYS: DPM) reported earnings on Feb. 28. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), DCP Midstream Partners whiffed on revenue and whiffed on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP loss per share increased.

Margins contracted across the board.

Revenue details
DCP Midstream Partners reported revenue of $387.2 million. The six analysts polled by S&P Capital IQ looked for sales of $436.4 million on the same basis. GAAP reported sales were 5.0% higher than the prior-year quarter's $368.9 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
Non-GAAP EPS came in at $0.39. The eight earnings estimates compiled by S&P Capital IQ forecast $0.44 per share on the same basis. GAAP EPS were -$0.18 for Q4 compared to -$0.12 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 9.3%, 880 basis points worse than the prior-year quarter. Operating margin was 1.4%, 10 basis points worse than the prior-year quarter. Net margin was -0.4%, 380 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $484.7 million. On the bottom line, the average EPS estimate is $0.60.

Next year's average estimate for revenue is $1.74 billion. The average EPS estimate is $1.50.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 200 members out of 210 rating the stock outperform, and 10 members rating it underperform. Among 80 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 79 give DCP Midstream Partners a green thumbs-up, and one gives it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on DCP Midstream Partners is outperform, with an average price target of $46.06.

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At the time thisarticle 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. 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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