Quicksilver Resources Earnings Preview

Investors braced for a bumpy ride ahead of Quicksilver Resources' (NYSE: KWK  ) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Monday, Feb. 27. Quicksilver Resources is an independent energy company engaged mainly in exploration, development, and production of unconventional natural gas onshore in North America.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Quicksilver Resources with 12 of 18 analysts rating it hold. Analysts don't like Quicksilver Resources as much as competitor Halcon Resources overall. Four out of five analysts rate Halcon Resources a buy compared to three of 18 for Quicksilver Resources. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $217.1 million in revenue this quarter. That would represent a decline of 9.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.02 per share. Estimates range from a loss of $0.07 to a profit of $0.22.

What our community says:
CAPS All-Stars are enthusiastically backing the stock, with 97.3% granting it an "outperform" rating. Most of the community concurs with the All-Stars, with 97.1% assigning it a rating of "outperform." Fools are gung-ho about Quicksilver Resources, though the message boards have been quiet lately with only four posts in the past 30 days. Even with a robust four out of five stars, Quicksilver Resources' CAPS rating falls a little short of the community's upbeat outlook.

Management:
The company's revenue has now risen for two straight quarters. The company's gross margin shrank by 10.9 percentage points in the last quarter. Revenue rose 9.3% while cost of sales rose 53.2% to $98.9 million from a year earlier.

Now, a look at how efficient management has been at running the business. Margins are a representation of how efficiently a company captures portions of sales dollars. The company's gross margins have been decreasing year-over-year for the last four quarters. Gross margins reflect the total sales revenue retained after costs. Here are Quicksilver Resources' reported margins for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

62.0%

60.0%

56.1%

63.5%

Operating Margin

26.2%

31.7%

(0.4%)

224.3%

Net Margin

11.0%

43.7%

(33.3%)

132.7%

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Earnings estimates provided by Zacks.

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