Natural Resource Partners Beats on Both Top and Bottom Lines

Natural Resource Partners (NYSE: NRP  ) reported earnings on Aug. 6. Here are the numbers you need to know.

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

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

Margins contracted across the board.

Revenue details
Natural Resource Partners booked revenue of $90.7 million. The four analysts polled by S&P Capital IQ wanted to see a top line of $84.9 million on the same basis. GAAP reported sales were 0.8% lower than the prior-year quarter's $91.4 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 $0.46. The five earnings estimates compiled by S&P Capital IQ predicted $0.39 per share. GAAP EPS of $0.46 for Q2 were 4.2% lower than the prior-year quarter's $0.48 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 94.5%, 480 basis points worse than the prior-year quarter. Operating margin was 70.0%, 90 basis points worse than the prior-year quarter. Net margin was 55.1%, 220 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $88.2 million. On the bottom line, the average EPS estimate is $0.43.

Next year's average estimate for revenue is $354.1 million. The average EPS estimate is $1.72.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 361 members out of 389 rating the stock outperform, and 28 members rating it underperform. Among 118 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 107 give Natural Resource Partners 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 Natural Resource Partners is outperform, with an average price target of $30.00.

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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 (2) | Recommend This Article (1)

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 Report this Comment icon found on every comment.

  • Report this Comment On August 07, 2012, at 2:15 PM, MockingJay2011 wrote:

    If NRP units were to increase to the average price target of $30, that would be a 1-yr total return of 64% from the current unit price of $19.65. That seems unlikely, as it implies the unit yield would have fallen from 11.2% today to 7.3%.

    Still, a total return of 33%-41% is possible if the unit's yield were to fall to 8.5%-9.0%.

  • Report this Comment On August 07, 2012, at 2:32 PM, JJButlerISA wrote:

    Coal production on their land was basically unchanged, with coal revenue down 12%. That is a testament to their asset strength. I also like where their ‘other’ revenue business is going. I just wish cash flow covered the safe distribution.

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