McMoRan Exploration Misses Where it Counts

McMoRan Exploration (NYSE: MMR  ) reported earnings on Oct. 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), McMoRan Exploration beat expectations on revenues and missed expectations on earnings per share.

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

Margins contracted across the board.

Revenue details
McMoRan Exploration tallied revenue of $91.8 million. The four analysts polled by S&P Capital IQ predicted a top line of $88.0 million on the same basis. GAAP reported sales were 34% lower than the prior-year quarter's $138.2 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 -$0.35. The six earnings estimates compiled by S&P Capital IQ predicted -$0.13 per share. GAAP EPS were -$0.40 for Q3 against -$0.06 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 47.8%, 790 basis points worse than the prior-year quarter. Operating margin was -51.4%, 3,710 basis points worse than the prior-year quarter. Net margin was -58.5%, 5,920 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $93.8 million. On the bottom line, the average EPS estimate is -$0.11.

Next year's average estimate for revenue is $380.2 million. The average EPS estimate is -$0.41.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 510 members out of 530 rating the stock outperform, and 20 members rating it underperform. Among 123 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 116 give McMoRan Exploration a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on McMoRan Exploration is outperform, with an average price target of $15.14.

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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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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 October 22, 2012, at 2:59 PM, duckduffer wrote:

    Forensic analysis of an exploration/exploitation company is the opposite of how you should evaluate this investment. It is a speculative play based on the prospects of the ultra deep. Do your research and you will find that MMR has massive upside if the energy structures at play can produce.

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