The 10-second takeaway
For the quarter ended June 30 (Q2), Tesoro beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped significantly.
Margins contracted across the board.
Tesoro booked revenue of $8.90 billion. The four analysts polled by S&P Capital IQ wanted to see a top line of $7.82 billion on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $7.99 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 $1.56. The 17 earnings estimates compiled by S&P Capital IQ predicted $1.48 per share. Non-GAAP EPS of $1.56 for Q2 were 46% lower than the prior-year quarter's $2.87 per share. GAAP EPS of $1.64 for Q2 were 40% lower than the prior-year quarter's $2.75 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 6.1%, 440 basis points worse than the prior-year quarter. Operating margin was 4.2%, 440 basis points worse than the prior-year quarter. Net margin was 2.6%, 220 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $9.07 billion. On the bottom line, the average EPS estimate is $1.80.
Next year's average estimate for revenue is $32.68 billion. The average EPS estimate is $4.93.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 928 members out of 1,000 rating the stock outperform, and 72 members rating it underperform. Among 271 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 253 give Tesoro a green thumbs-up, and 18 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Tesoro is outperform, with an average price target of $69.56.
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