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Encana Beats on EPS But GAAP Results Lag

By Seth Jayson - Updated Apr 7, 2017 at 12:11PM

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Just the facts, Fool.

Encana (NYSE: ECA) reported earnings on Oct. 25. Here are the numbers you need to know.

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

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

Margins dropped across the board.

Revenue details
Encana notched revenue of $1.03 billion. The five analysts polled by S&P Capital IQ looked for sales of $1.57 billion on the same basis. GAAP reported sales were 56% lower than the prior-year quarter's $2.35 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 $0.36. The 15 earnings estimates compiled by S&P Capital IQ predicted $0.26 per share. GAAP EPS were -$1.69 for Q3 versus $0.16 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 38.1%, 3,200 basis points worse than the prior-year quarter. Operating margin was -17.2%, 4,780 basis points worse than the prior-year quarter. Net margin was -121.4%, 12,650 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.57 billion. On the bottom line, the average EPS estimate is $0.31.

Next year's average estimate for revenue is $5.54 billion. The average EPS estimate is $1.13.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,114 members out of 1,148 rating the stock outperform, and 34 members rating it underperform. Among 240 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 235 give Encana a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Encana is hold, with an average price target of $21.00.

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