Energy Transfer Equity Crushes Earnings Estimates

Seth Jayson, The Motley Fool
Updated

Energy Transfer Equity (NYS: ETE) reported earnings on May 8. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Energy Transfer Equity whiffed on revenues and crushed expectations on earnings per share.

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


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

Revenue details
Energy Transfer Equity booked revenue of $1.69 billion. The three analysts polled by S&P Capital IQ anticipated revenue of $2.04 billion on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $1.99 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 $1.24. The five earnings estimates compiled by S&P Capital IQ predicted $0.38 per share. GAAP EPS of $0.73 for Q1 were 83% higher than the prior-year quarter's $0.40 per share.

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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 29.1%, 30 basis points better than the prior-year quarter. Operating margin was 10.8%, 750 basis points worse than the prior-year quarter. Net margin was 9.9%, 550 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.25 billion. On the bottom line, the average EPS estimate is $0.46.

Next year's average estimate for revenue is $8.90 billion. The average EPS estimate is $2.05.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 214 members out of 227 rating the stock outperform, and 13 members rating it underperform. Among 75 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 71 give Energy Transfer Equity 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 Energy Transfer Equity is outperform, with an average price target of $46.43.

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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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