Statoil ASA Misses on the Top and Bottom Lines

Statoil ASA (NYSE: STO  ) reported earnings on July 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Statoil ASA missed estimates on revenues and missed estimates on earnings per share.

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

Margins dropped across the board.

Revenue details
Statoil ASA notched revenue of $24.33 billion. The 10 analysts polled by S&P Capital IQ anticipated revenue of $26.08 billion on the same basis. GAAP reported sales were 22% lower than the prior-year quarter's $31.32 billion.

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 $0.22. The two earnings estimates compiled by S&P Capital IQ predicted $0.67 per share. GAAP EPS of $0.22 for Q2 were 84% lower than the prior-year quarter's $1.39 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 38.4%, 10 basis points worse than the prior-year quarter. Operating margin was 23.1%, 250 basis points worse than the prior-year quarter. Net margin was 2.9%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $26.97 billion. On the bottom line, the average EPS estimate is $0.53.

Next year's average estimate for revenue is $108.26 billion. The average EPS estimate is $2.66.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,151 members out of 1,182 rating the stock outperform, and 31 members rating it underperform. Among 215 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 209 give Statoil ASA a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Statoil ASA is outperform, with an average price target of $26.34.

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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 recommends Statoil (ADR). 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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  • Report this Comment On July 26, 2013, at 9:53 PM, EllenBrandtPhD wrote:

    Seth, you may have missed my comment at Bloomie's, so I will repeat it here:

    "Loss on derivatives and trading" says it all!

    Clearly, the company was badly impacted by the extraordinarily low NOK, which meant its costs were much higher than they would otherwise be. In addition, STO's taxes have been absurdly high, under the confiscatory policies of the Stoltenberg government.

    Not only has the story going forward not changed, this makes it even more dramatic, and I would not be surprised if some analysts who are astute about European politics raise ratings and targets very shortly.

    So once again: Erna Solberg now, in many polls, enjoys a 30 point lead over the incumbent Jens Stoltenberg, with the election only about 5 weeks away.

    Solberg and the CDs will constitute the most business friendly - and STO-friendly - government in Norway in over 50 years, perhaps 70 years.

    Solberg wants a much stronger NOK, and you will notice that a couple of weeks ago, the NOK started escalating, as her election became more and more probable. That alone helps STO.

    Solberg and the CDs have vowed, as a campaign plank, to cut business taxes sharply, which benefits STO more than any other Norwegian company.

    And Solberg and the CDs, also as a campaign plank, have vowed to spin off a hefty portion of STO shares owned by the government. She said - direct quote - "we will want to get the highest possible price" for these shares.

    That means that upon a Solberg election five weeks from now, the entire weight of the Norwegian government and its powerful sovereign wealth fund will stand behind STO, doing everything in their power to push up the stock price prior to a sale.

    This - not anything to do with operations nor earnings - is why so many analysts have upped their stock price ratings and targets on STO the past three months. Now that this last Stoltenberg-government-impeded earnings report is out of the way, let's see if pretty much the entire analyst cadre chooses to raise.

    Politics don't often affect stocks this strongly.This is a special situation and should be treated as such.

  • Report this Comment On July 26, 2013, at 10:08 PM, EllenBrandtPhD wrote:

    Note: I wrote that yesterday, as soon as the report came out.

    And several things which occurred over the past two trading days confirm my above thesis.

    *** STO pretty much immediately got an upgrade from Denmark's largest bank and late today a downgrade from Sweden's largest bank.

    Hint: Denmark, which is politically tied to Germany these days, favors remaining pro-business efforts in Northern Europe and wants both a Merkel win and a Solberg win.

    Sweden, which is Sweden, which is Sweden - doesn't.

    *** STO held up very nicely yesterday BECAUSE THE NOK RALLIED. STO did not hold up particularly well today BECAUSE THE DOLLAH! DOLLAH! DOLLAH! MADE A HALF-HEARTED RALLY AGAINST THE NOK. Pretty much period.

    *** This Dollah! Dollah! Dollah! rally against the NOK was fairly unusual, given the massive escalation in the Yen today and the fact that both the Loonie and the Aussie held up OK, if not dramatically.

    The hidden reason for this was a piece in the very influential EuroMoney this morning, which strongly refuted the OECD, which is making its strange currency predictions based on Goddess knows what.

    Euromoney made a strong case that the Loonie, the Aussie, and especially the NOK were considerably UNDERvalued against the Dollah! Dollah! Dollah! right now. The OECD and Bloomie's Currency Desk - which is pretty much under the thumb of those supporting the Yen Short of the Ages - believe the opposite.

    So take your currency position and make your STO bet.

    But note once more that Erna Solberg wants a stronger NOK, much lower business taxes, and to spin off some of STO at what most think is a minimum price of 30.

    And Solberg is still reported to be 30 points ahead.

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