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Carrizo Oil & Gas Misses Where It Counts

Carrizo Oil & Gas (Nasdaq: CRZO  ) reported earnings on Aug. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Carrizo Oil & Gas 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 expanded significantly.

Gross margins improved, operating margins shrank, and net margins increased.

Revenue details
Carrizo Oil & Gas booked revenue of $92.0 million. The two analysts polled by S&P Capital IQ wanted to see sales of $86.8 million on the same basis. GAAP reported sales were 82% higher than the prior-year quarter's $50.7 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 $0.26. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.38 per share. GAAP EPS of $0.71 for Q2 were 255% higher than the prior-year quarter's $0.20 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 89.0%, 660 basis points better than the prior-year quarter. Operating margin was 24.9%, 1,080 basis points worse than the prior-year quarter. Net margin was 31.0%, 1,570 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $102.3 million. On the bottom line, the average EPS estimate is $0.56.

Next year's average estimate for revenue is $398.9 million. The average EPS estimate is $2.25.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 269 members out of 299 rating the stock outperform, and 30 members rating it underperform. Among 64 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 54 give Carrizo Oil & Gas 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 Carrizo Oil & Gas is outperform, with an average price target of $36.19.

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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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 10, 2012, at 11:53 AM, indytom01 wrote:

    What this article fails to point out is the earnings miss was due to a non-cash DD&A related to primarily to the sale of dry gas assets. This was explained on the conference call and in the press release as well I think. Here is the quote, "Adjusted net income was essentially flat, compared to the second quarter 2011, due largely to higher DD&A, primarily attributable to the April 2012, sale of natural gas properties to Atlas." As a result, I think the headline on this article is seriously misleading.

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