The Gory Details on Hess' Double Miss

Hess (NYSE: HES  ) reported earnings on April 25. Here are the numbers you need to know.

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

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

Gross margins improved, operating margins contracted, net margins dropped.

Revenue details
Hess tallied revenue of $9.75 billion. The three analysts polled by S&P Capital IQ wanted to see revenue of $10.37 billion on the same basis. GAAP reported sales were 3.9% lower than the prior-year quarter's $10.14 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $1.50. The 16 earnings estimates compiled by S&P Capital IQ predicted $1.54 per share on the same basis. GAAP EPS of $1.61 for Q1 were 41% lower than the prior-year quarter's $2.74 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 24.6%, 200 basis points better than the prior-year quarter. Operating margin was 10.3%, 160 basis points worse than the prior-year quarter. Net margin was 5.6%, 360 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $11.06 billion. On the bottom line, the average EPS estimate is $1.58.

Next year's average estimate for revenue is $38.94 billion. The average EPS estimate is $6.71.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 923 members out of 956 rating the stock outperform, and 33 members rating it underperform. Among 213 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 205 give Hess a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Hess is outperform, with an average price target of $78.76.

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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 of Motley 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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10/24/2016 4:01 PM
HES $52.22 Down -0.54 -1.02%
Hess CAPS Rating: ****