Why Stone Energy (SGY) Is Down Today

NEW YORK (TheStreet) -- Stone Energy  (SGY) was falling 5.05% to $34.78 on Tuesday afternoon after the company reported fourth-quarter earnings that came up short of analysts' estimates.

The company reported earnings per share of 56 cents, which was short of the Zacks consensus estimate of 61 cents and marker a 37.1% year-over-year decline from 89 cents. The company cited lower price realizations as the reason for the weak performance. Total operating revenue declined 6.1% year over year to $239.3 million from $254.9 million and came up short of the consensus estimate of $245 million.

For the full year, Stone Energy earned $2.88 a share, down from $3.03 one year earlier. This also missed the consensus estimate of $2.94. Revenue for the year totaled $974.2 million, a 2.4% increase from $951.5 million one year ago.

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TheStreet Ratings team rates STONE ENERGY CORP as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate STONE ENERGY CORP (SGY) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, increase in net income, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 13.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 50.00% and other important driving factors, this stock has surged by 77.13% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SGY should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for STONE ENERGY CORP is rather high; currently it is at 69.77%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.15% is above that of the industry average.
  • Net operating cash flow has increased to $163.54 million or 31.36% when compared to the same quarter last year. In addition, STONE ENERGY CORP has also vastly surpassed the industry average cash flow growth rate of -51.05%.
  • You can view the full analysis from the report here: SGY Ratings Report

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