NEW YORK (TheStreet) -- Spectra Energy (SE - Get Report) shares are gaining 1.32% to $29.17 on Tuesday ahead of the company's third quarter fiscal 2015 earnings results due out before tomorrow's opening bell.
Year-over-year, profits are projected to decline while sales are estimated to grow.
For the latest quarter, analysts are expecting the company to earn 22 cents a share on revenue of $1.3 billion.
In the same period a year ago, the company earned 31 cents a share on revenue of $1.2 billion.
For the latest quarter, analysts anticipate strong returns from the company's western Canadian assets, BC Pipeline, BC Field Services and Midstream and Natural Gas Liquids, according to Zacks Equity Research.
Based in Houston, Spectra Energy owns and operates a portfolio of natural gas-related energy assets in North America.
Separately, TheStreet Ratings team rates SPECTRA ENERGY CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate SPECTRA ENERGY CORP (SE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to $690.00 million or 31.93% when compared to the same quarter last year. In addition, SPECTRA ENERGY CORP has also vastly surpassed the industry average cash flow growth rate of -19.63%.
- The gross profit margin for SPECTRA ENERGY CORP is rather high; currently it is at 51.17%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 1.51% trails the industry average.
- Despite the weak revenue results, SE has outperformed against the industry average of 33.1%. Since the same quarter one year prior, revenues slightly dropped by 4.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Currently the debt-to-equity ratio of 1.81 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.37, which clearly demonstrates the inability to cover short-term cash needs.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SPECTRA ENERGY CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: SE