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EXCO Resources Goes Red

EXCO Resources (NYSE: XCO  ) reported earnings on July 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), EXCO Resources whiffed on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted significantly and GAAP earnings per share contracted to a loss. The non-GAAP profit was a surprise, as analysts had predicted a loss.

Margins dropped across the board.

Revenue details
EXCO Resources chalked up revenue of $118.0 million. The five analysts polled by S&P Capital IQ looked for revenue of $175.2 million on the same basis. GAAP reported sales were 43% lower than the prior-year quarter's $206.8 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 $0.05. The nine earnings estimates compiled by S&P Capital IQ forecast -$0.01 per share. GAAP EPS were -$2.32 for Q2 against $0.38 per share for the prior-year quarter.

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 56.3%, 2,110 basis points worse than the prior-year quarter. Operating margin was -403.5%, 44,810 basis points worse than the prior-year quarter. Net margin was -420.8%, 46,060 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $175.9 million. On the bottom line, the average EPS estimate is $0.03.

Next year's average estimate for revenue is $747.4 million. The average EPS estimate is $0.12.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 487 members out of 512 rating the stock outperform, and 25 members rating it underperform. Among 89 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 79 give EXCO Resources a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on EXCO Resources is hold, with an average price target of $7.09.

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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. The Motley Fool has no positions in the stocks mentioned above. 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.

Read/Post Comments (1) | Recommend This Article (1)

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  • Report this Comment On August 02, 2012, at 7:51 AM, rsinj wrote:

    Revenues missed estimates by over 30% - that is ridiculous! As for the "profit" - that's non-GAAP ... no more than financial engineering in my book. Hey, what did they pay income tax based on - their GAAP numbers or their non-GAAP?

    And for anyone who believes GAAP is not useful because there were noncash writedowns, well you still have the very real long-term debt used to purchase the assets that had to be written down.

    The stock should trade lower. This is nothing more than another house of cards, there's nothing special about this company and as the GAAP earnings showed they continue to post massive losses.

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EXCO Resources CAPS Rating: **