So, the Wheels Came Off Rosetta Resources's Bus (ROSE)

So, the Wheels Came Off Rosetta Resources's Bus

Rosetta Resources (Nasdaq: ROSE ) reported earnings on Feb. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Rosetta Resources missed estimates on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share expanded significantly. GAAP earnings per share expanded significantly.

Gross margins were steady, operating margins dropped, net margins dropped.

Revenue details
Rosetta Resources chalked up revenue of $178.3 million. The 12 analysts polled by S&P Capital IQ predicted revenue of $183.8 million on the same basis. GAAP reported sales were 57% higher than the prior-year quarter's $136.3 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 $0.79. The 21 earnings estimates compiled by S&P Capital IQ forecast $0.93 per share. Non-GAAP EPS of $0.79 for Q4 were 30% higher than the prior-year quarter's $0.61 per share. GAAP EPS of $0.80 for Q4 were 31% higher than the prior-year quarter's $0.61 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 84.8%, much about the same as the prior-year quarter. Operating margin was 36.6%, 330 basis points worse than the prior-year quarter. Net margin was 19.8%, 380 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $191.6 million. On the bottom line, the average EPS estimate is $0.95.

Next year's average estimate for revenue is $842.0 million. The average EPS estimate is $4.26.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 290 members out of 308 rating the stock outperform, and 18 members rating it underperform. Among 80 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 77 give Rosetta Resources a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rosetta Resources is outperform, with an average price target of $56.92.

Is Rosetta Resources the right energy stock for you? Read about a handful of timely, profit-producing plays on expensive crude in "3 Stocks for $100 Oil." Click here for instant access to this free report.

Add Rosetta Resources to My Watchlist.

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 position in any of the stocks mentioned. 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.

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 icon found on every comment.