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The Gory Details of Concho Resources's Earnings Miss

Thursday - 5/2/2013, 2:00am  ET

Concho Resources reported earnings on May 1. Here are the numbers you need to know.

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

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

Gross margins contracted, operating margins shrank, net margins grew.

Revenue details
Concho Resources booked revenue of $472.1 million. The 15 analysts polled by S&P Capital IQ looked for net sales of $497.2 million on the same basis. GAAP reported sales were 7.0% lower than the prior-year quarter's $507.8 million.

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 $0.58. The 26 earnings estimates compiled by S&P Capital IQ predicted $0.78 per share. Non-GAAP EPS of $0.58 for Q1 were 45% lower than the prior-year quarter's $1.05 per share. GAAP EPS of $0.29 for Q1 were 3.3% lower than the prior-year quarter's $0.30 per share.

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 78.6%, 390 basis points worse than the prior-year quarter. Operating margin was 17.1%, 10 basis points worse than the prior-year quarter. Net margin was 6.4%, 30 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $571.6 million. On the bottom line, the average EPS estimate is $1.11.

Next year's average estimate for revenue is $2.31 billion. The average EPS estimate is $4.36.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 238 members out of 257 rating the stock outperform, and 19 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give Concho Resources a green thumbs-up, and two 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 $109.55.

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This article was originally published as The Gory Details of Concho Resources's Earnings Misson Fool.com

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