QR Energy Crushes Earnings Estimates (QRE)

QR Energy Crushes Earnings Estimates

QR Energy (NYSE: QRE ) reported earnings on March 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), QR Energy crushed expectations on revenues and crushed expectations on earnings per share.

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

Margins shrank across the board.

Revenue details
QR Energy chalked up revenue of $97.4 million. The nine analysts polled by S&P Capital IQ expected revenue of $76.2 million on the same basis. GAAP reported sales were 42% lower than the prior-year quarter's $168.7 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 $2.21. The 13 earnings estimates compiled by S&P Capital IQ forecast $0.23 per share. Non-GAAP EPS of $2.21 for Q4 were 325% higher than the prior-year quarter's $0.52 per share. GAAP EPS were $0.24 for Q4 compared to -$1.30 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 59.1%, 560 basis points worse than the prior-year quarter. Operating margin was 15.2%, much worse than the prior-year quarter. Net margin was 2.0%, much worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $99.4 million. On the bottom line, the average EPS estimate is $0.33.

Next year's average estimate for revenue is $420.6 million. The average EPS estimate is $1.44.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 94 members out of 98 rating the stock outperform, and four members rating it underperform. Among 40 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give QR Energy a green thumbs-up, and give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on QR Energy is outperform, with an average price target of $21.05.

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Comments from our Foolish Readers

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Report this Comment On March 06, 2013, at 6:54 PM, zorro6204 wrote:

Who rights this nonsense? Or what program? Clearly it, he, she, knows nothing about the subjects of the article. QRE did very well, yes. But the wide variances cited are due to a restatement of commonly owned properties acquired.
If QRE "crushed" you might have expected it to go up, but it was the one to be crushed. Why? Due to confusion and concern over g&a fees and an incentive fee in 2012 converted to units, a feeling that somehow unit dcf might be negatively affected going forward (even though management guided towards no such outcome). The article says nothing about these issues.
And is therefore worthless, but someone needs to remind mf readers of this undeniable fact.
Report this Comment On March 06, 2013, at 9:12 PM, PharaohStar wrote:

Okay, I am bit lost here. The earnings report this morning indicated that they missed earnings and missed big -- along the lines of -0.47 (the original article has been updated and the EPS is now not shown).
Now I am trying make sense of the earnings call transcript and I am confused. Seems the only thing to get crushed today was the stock price.
What am I missing?
Report this Comment On March 07, 2013, at 12:47 AM, zorro6204 wrote:

It was a complicated quarter, it caught the company in transition during property acquisitions and a restructuring of expense sharing with the sponsor and other programs of the sponsor to come. In addition generally mlp's recorded losses due to the GAAP treatment of hedging derivatives, something that really has nothing to due with what we care about, which is cash flow.
The important thing to take away from the call is that the company will continue to grow in 2013 through more drop-downs (lots of backlog) and third-party acquisitions. But the key is that management is committed to the distribution (which forms part of their comp), committed to coverage of at least 1.2, committed to one of the most extensive hedging packages in the business, and that everything they're doing is expected to be accretive.
Pricing could hardly have been worse for NGL's recently (something that's difficult to hedge), but they still covered at 1.2, and they don't expect the structural changes to change that, the expanded asset base is forecast to cover the unit holder base and new units that no doubt will be coming.
Like all upstreams do in the normal course, it's just that a lot of things are happening at once with this relatively new mlp, and it looks like the market is taking a wait and see attitude.

updated Moments ago Sponsored by:
	DOW	15,294.50	-12.67	-0.08%
	S&P 500	1,650.51	-4.84	-0.29%
	NASD	3,459.42	-3.88	-0.11%

QRE	$17.27		+0.22	+1.29%
QR ENERGY LP		CAPS Rating:

1

QR Energy Crushes Earnings Estimates

Comments from our Foolish Readers

Report this Comment On March 06, 2013, at 6:54 PM, zorro6204 wrote:

Report this Comment On March 06, 2013, at 9:12 PM, PharaohStar wrote:

Report this Comment On March 07, 2013, at 12:47 AM, zorro6204 wrote:

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