Filed Under: ,
Tickers in this Article: SE
Spectra Energy (NYSE:SE) announced its results for the third quarter on November 1, 2012. Spectra Energy, through its subsidiaries and equity affiliates, owns and operates natural gas-related energy assets.

In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: How To Decode A Company's Earnings Reports

The Numbers: Spectra Energy missed estimates with 27 cents per share and revenues of $1.07 billion. Analysts were expecting 31 cents per share and revenues of $1.62 billion. Revenue fell 4.5% from the same period last year while EPS is down 30.8%. Last quarter marks the third in a row in which the company has seen falling revenue on a year-over-year basis. The company's net income for the quarter was $179 million. According to the reported number, this is down 29.5% from last year's figures. The company has now reported lower net income in each of the last four quarters.

Management Quote: "Spectra Energy's fee-based businesses continued to generate strong earnings and cash flows, helping to lessen the effects of lower commodity prices," said Greg Ebel, president and chief executive officer, Spectra Energy Corp. "Industry fundamentals and our commitment to delivering superior total shareholder return remain strong, as underlined by our action to increase the quarterly dividend, effective with the fourth quarter 2012 payment. Looking ahead, we remain confident in our ability to secure and deliver growth for our investors through realizing at least $20 billion in expansion projects by the end of the decade."

A Look Back: Net income has dropped 8.3% year-over-year on average across the last five quarters. Performance was hurt by a 29.5% decline in the most recent quarter from the year-earlier quarter.

Looking Ahead: Over the past 90 days, the average estimate for the fourth quarter has fallen from 44 cents per share to 41 cents, indicating that analysts are growing pessisimistic about the company's performance next quarter. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. For the fiscal year, the average estimate has moved down from $1.65 a share to $1.58 over the last 90 days.

comments powered by Disqus

Trading Center