SM Energy Beats on EPS, but GAAP Results Lag

SM Energy (NYSE: SM  ) reported earnings on Feb. 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), SM Energy beat expectations on revenues and beat expectations on earnings per share.

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

Margins contracted across the board.

Revenue details
SM Energy recorded revenue of $379.5 million. The 12 analysts polled by S&P Capital IQ looked for revenue of $346.5 million on the same basis. GAAP reported sales were 41% higher than the prior-year quarter's $268.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.60. The 19 earnings estimates compiled by S&P Capital IQ forecast $0.56 per share on the same basis. GAAP EPS were -$1.89 for Q4 versus $0.57 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 72.1%, 140 basis points worse than the prior-year quarter. Operating margin was -47.7%, 5,970 basis points worse than the prior-year quarter. Net margin was -31.8%, 4,560 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $384.6 million. On the bottom line, the average EPS estimate is $0.64.

Next year's average estimate for revenue is $1.80 billion. The average EPS estimate is $3.64.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 293 members out of 310 rating the stock outperform, and 17 members rating it underperform. Among 80 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 76 give SM Energy a green thumbs-up, and four 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 $96.83.

Are you missing a major story in the energy space? Read about "One Stock to Own Before Nat Gas Act 2011 Becomes Law." Get instant access to this free report.

• Add SM Energy to My Watchlist.