Encana Beats Up on Analysts Yet Again

Encana (NYS: ECA) reported earnings on July 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Encana crushed expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share expanded significantly. GAAP earnings per share grew.

Margins increased across the board.

Revenue details
Encana booked revenue of $1.98 billion. The four analysts polled by S&P Capital IQ predicted sales of $1.46 billion on the same basis. GAAP reported sales were much higher than the prior-year quarter's $731.0 million.

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

EPS details
EPS came in at $0.34. The 16 earnings estimates compiled by S&P Capital IQ forecast $0.18 per share. Non-GAAP EPS of $0.34 for Q2 were 26% higher than the prior-year quarter's $0.27 per share. GAAP EPS were $0.99 for Q2 versus -$2.01 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 64.6%, much better than the prior-year quarter. Operating margin was 40.0%, much better than the prior-year quarter. Net margin was 36.8%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.53 billion. On the bottom line, the average EPS estimate is $0.28.

Next year's average estimate for revenue is $5.97 billion. The average EPS estimate is $0.94.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,098 members out of 1,129 rating the stock outperform, and 31 members rating it underperform. Among 195 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 190 give Encana a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Encana is hold, with an average price target of $21.40.

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