The Gory Details on Legacy Reserves' Double Fumble (LGCY)

The Gory Details on Legacy Reserves' Double Fumble

Legacy Reserves (Nasdaq: LGCY ) reported earnings on Aug. 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Legacy Reserves missed estimates on revenues and missed estimates on earnings per share.

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

Gross margins dropped, operating margins dropped, net margins expanded.

Revenue details
Legacy Reserves reported revenue of $79.2 million. The six analysts polled by S&P Capital IQ expected sales of $87.7 million on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $92.8 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 $0.21. The six earnings estimates compiled by S&P Capital IQ averaged $0.47 per share. GAAP EPS of $1.73 for Q2 were 15% higher than the prior-year quarter's $1.51 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 60.7%, 1,070 basis points worse than the prior-year quarter. Operating margin was 22.2%, 5,610 basis points worse than the prior-year quarter. Net margin was 104.8%, 3,390 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $90.5 million. On the bottom line, the average EPS estimate is $0.50.

Next year's average estimate for revenue is $363.6 million. The average EPS estimate is $1.97.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 263 members out of 271 rating the stock outperform, and eight members rating it underperform. Among 81 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 80 give Legacy Reserves a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Legacy Reserves is buy, with an average price target of $33.25.

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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.

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