The 10-second takeaway
For the quarter ended March 31 (Q1), SM Energy beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share dropped significantly.
Gross margins increased, operating margins contracted, net margins shrank.
SM Energy recorded revenue of $484.2 million. The 15 analysts polled by S&P Capital IQ predicted sales of $462.6 million on the same basis. GAAP reported sales were 29% higher than the prior-year quarter's $374.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.82. The 25 earnings estimates compiled by S&P Capital IQ predicted $0.58 per share. Non-GAAP EPS of $0.82 for Q1 were 71% higher than the prior-year quarter's $0.48 per share. GAAP EPS of $0.25 for Q1 were 36% lower than the prior-year quarter's $0.39 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 74.1%, 40 basis points better than the prior-year quarter. Operating margin was 13.6%, 210 basis points worse than the prior-year quarter. Net margin was 3.5%, 350 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $493.5 million. On the bottom line, the average EPS estimate is $0.65.
Next year's average estimate for revenue is $2.04 billion. The average EPS estimate is $2.88.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 281 members out of 298 rating the stock outperform, and 17 members rating it underperform. Among 55 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give SM Energy 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 SM Energy is outperform, with an average price target of $74.12.
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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 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.