Flotek Industries Increases Sales but Misses Estimates on Earnings (FTK)

Flotek Industries Increases Sales but Misses Estimates on Earnings

Flotek Industries (NYSE: FTK ) reported earnings on May 9. Here are the numbers you need to know.

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

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

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

Revenue details
Flotek Industries chalked up revenue of $79.2 million. The four analysts polled by S&P Capital IQ hoped for revenue of $75.6 million on the same basis. GAAP reported sales were 50% higher than the prior-year quarter's $52.9 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 $0.07. The four earnings estimates compiled by S&P Capital IQ predicted $0.18 per share. GAAP EPS of $0.07 for Q1 were 46% lower than the prior-year quarter's $0.13 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 42.2%, 220 basis points better than the prior-year quarter. Operating margin was 21.1%, 360 basis points better than the prior-year quarter. Net margin was 4.6%, 1,500 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $77.2 million. On the bottom line, the average EPS estimate is $0.19.

Next year's average estimate for revenue is $331.2 million. The average EPS estimate is $0.87.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 762 members out of 796 rating the stock outperform, and 34 members rating it underperform. Among 167 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 156 give Flotek Industries a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Flotek Industries is buy, with an average price target of $16.33.

Over the decades, small-cap stocks, like Flotek Industries have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.

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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.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On May 10, 2012, at 1:45 PM, wtbthree wrote:

The Flotek pre-extra items were better than what you reported in your article.
Report this Comment On May 10, 2012, at 1:49 PM, wtbthree wrote:

Followup on Flotek release
"Included in the first quarter 2012 results was $9.3 million of non-cash expense related to the change in the fair value of the warrant liability associated with the warrants issued in the August 2009 preferred stock offering ($3.9 million) and loss related to the early retirement of certain of the Company's convertible notes ($5.4 million). In the same quarter of 2011 the Company recorded non-cash income related to the fair value of the warrant liability of $7.6 million.
Excluding non-cash items, the Company earned $0.25 per common share on a fully diluted basis."
Report this Comment On May 10, 2012, at 4:26 PM, rightlyso1 wrote:

Evidently, some of the staff employed here should be washing dishes as this doesnot comprise too much cerebral undertaking.
Had you known how to read a balance sheet, financial statements or even the press release you would have not mislead your readers as the company made 12 mill bucks, free and clear. About 25 cents per share. They not only beat but they are inline with hitting high level targets for the year.
In spite, of an excellent quarter, signing of a 3 year suplly contract with a large driller and having increased cash in 6 million in just a month, your article gives the appearance of a company that is running off the tracks. You are either incompetent or you should be reported to the SEC as publishing financial information with an ulterior agenda.
Report this Comment On May 11, 2012, at 11:21 AM, bmccle wrote:

Are you serious? I thought you ran a reputable business? Can you/your staff not read financials? Flotek substantially BEAT estimates, .25 vs .18. Good lord.

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Flotek Industries,…		CAPS Rating:

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Flotek Industries Increases Sales but Misses Estimates on Earnings

Comments from our Foolish Readers

Report this Comment On May 10, 2012, at 1:45 PM, wtbthree wrote:

Report this Comment On May 10, 2012, at 1:49 PM, wtbthree wrote:

Report this Comment On May 10, 2012, at 4:26 PM, rightlyso1 wrote:

Report this Comment On May 11, 2012, at 11:21 AM, bmccle wrote:

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