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.
Is Tesoro the right energy stock for you? Read about a handful of timely, profit-producing plays on expensive crude in "3 Stocks for $100 Oil." Click here for instant access to this free report.
- Add Tesoro to My Watchlist.
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. 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.