Concho Resources Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

Concho Resources (NYS: CXO) reported earnings May 2. Here are the numbers you need to know.

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

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


Gross margins dropped, operating margins grew, net margins dropped.

Revenue details
Concho Resources logged revenue of $507.8 million. The 10 analysts polled by S&P Capital IQ foresaw sales of $485.4 million on the same basis. GAAP reported sales were 41% higher than the prior-year quarter's $360.8 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 $1.05. The 21 earnings estimates compiled by S&P Capital IQ predicted $1.14 per share. GAAP EPS of $0.30 for Q1 were 27% lower than the prior-year quarter's $0.41 per share. (The prior-year quarter included $0.89 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 81.9%, 120 basis points worse than the prior-year quarter. Operating margin was 17.2%, 3,080 basis points better than the prior-year quarter. Net margin was 6.1%, 570 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $496.2 million. On the bottom line, the average EPS estimate is $1.17.

Next year's average estimate for revenue is $2.09 billion. The average EPS estimate is $4.97.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 236 members rating the stock outperform and 17 members rating it underperform. Among 52 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 48 give Concho Resources 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 Concho Resources is outperform, with an average price target of $123.63.

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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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