EnCana Goes Negative

Seth Jayson, The Motley Fool
Updated

EnCana (NYS: ECA) reported earnings on July 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), EnCana whiffed on revenue and beat expectations on earnings per share.

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


Margins shrank across the board.

Revenue details
EnCana logged revenue of $731.0 million. The five analysts polled by S&P Capital IQ anticipated revenue of $1.59 billion on the same basis. GAAP reported sales were 63% lower than the prior-year quarter's $1.99 billion.

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 $0.27. The 15 earnings estimates compiled by S&P Capital IQ anticipated $0.18 per share. GAAP EPS were -$2.01 for Q2 versus $0.21 per share for the prior-year quarter.

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 21.8%, 4,070 basis points worse than the prior-year quarter. Operating margin was -57.6%, 6,680 basis points worse than the prior-year quarter. Net margin was -202.7%, 21,160 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.59 billion. On the bottom line, the average EPS estimate is $0.20.

Next year's average estimate for revenue is $5.87 billion. The average EPS estimate is $1.16.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,135 members out of 1,165 rating the stock outperform, and 30 members rating it underperform. Among 229 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 224 give EnCana a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on EnCana is hold, with an average price target of $20.50.

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The article EnCana Goes Negative originally appeared on Fool.com.

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. The Motley Fool has no positions in the stocks mentioned above. 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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