The 10-second takeaway
For the quarter ended June 30 (Q2), Hess crushed expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly. Non-GAAP earnings per share dropped. GAAP earnings per share expanded significantly.
Margins grew across the board.
Hess recorded revenue of $4.11 billion. The two analysts polled by S&P Capital IQ expected sales of $2.87 billion on the same basis. GAAP reported sales were 56% lower than the prior-year quarter's $9.30 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $1.51. The 18 earnings estimates compiled by S&P Capital IQ forecast $1.42 per share. Non-GAAP EPS of $1.51 for Q2 were 12% lower than the prior-year quarter's $1.72 per share. GAAP EPS of $4.16 for Q2 were 158% higher than the prior-year quarter's $1.61 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 75.0%, much better than the prior-year quarter. Operating margin was 51.1%, much better than the prior-year quarter. Net margin was 34.9%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.71 billion. On the bottom line, the average EPS estimate is $1.50.
Next year's average estimate for revenue is $11.77 billion. The average EPS estimate is $6.36.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 940 members out of 975 rating the stock outperform, and 35 members rating it underperform. Among 192 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 183 give Hess a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Hess is outperform, with an average price target of $79.56.
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