Energen Earnings Preview

Energen (NYSE: EGN  ) didn't hit the Street's expectations last quarter, but investors hope it will rebound this quarter. The company will unveil its latest earnings on Wednesday. Energen is engaged in the development, acquisition, exploration, and production of oil and natural gas and natural gas liquids in the continental U.S. and in the purchase, distribution, and sale of natural gas in central and north Alabama.

What analysts say

• Buy, sell, or hold?: Analysts think investors should stand pat on Energen with seven of 12 analysts rating it hold. Analysts like Energen better than competitor Questar overall. Four out of 10 analysts rate Questar a buy compared to five of 12 for Energen. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
• Revenue forecasts: On average, analysts predict $334.1 million in revenue this quarter. That would represent a rise of 0.1% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.78 per share. Estimates range from $0.74 to $0.85.

What our community says
CAPS All-Stars are solidly behind the stock with 100% awarding it an outperform rating. The community at large agrees with the All-Stars with 96.5% granting it a rating of outperform. Fools are bullish on Energen, though the message boards have been quiet lately with only 46 posts in the past 30 days. Energen has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management
A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross and net margins over the past four quarters.

Quarter	Q1	Q4	Q3	Q2
Gross Margin	51.6%	58.9%	49.1%	54.1%
Net Margin	19.4%	21.5%	12.9%	16.6%

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