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Sea Limited (SE) Down 11.3% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Sea Limited Sponsored ADR (SE - Free Report) . Shares have lost about 11.3% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is SE due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fourth-Quarter 2016 Results
Premier natural gas company Spectra Energy Corp. reported fourth-quarter 2016 earnings per share from continuing operations of $0.28, which lagged the Zacks Consensus Estimate of $0.33. The bottom line remained flat on a year-over-year basis. The decline is mainly attributable to lackluster performance of Western Canada Transmission & Processing and Field Services segment.
The company’s operating revenues of $1,298 million fell 1.4% from the year-ago level of $1,316 million and also came in below the Zacks Consensus Estimate of $1,426 million.
Full-year 2016 earnings of $1.19 per share lagged the Zacks Consensus Estimate of $1.20. Enbridge Energy Partners posted earnings of $1.15 per share in 2015.
Total revenue for the full year decreased to $4,916 million from $5,234 million in 2015. It also lagged the Zacks Consensus Estimate of $5,098.0 million.
Operational Analysis
Spectra Energy Partners: The segment posted quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) of $537.0 million, up 11% from the year-ago quarter. The improvement was mainly driven by higher earnings from expansion projects commissioned in the second half of 2016 in both the natural gas transmission and liquids businesses. Also, increased Allowance for Funds Used During Construction (AFUDC), mainly from the Sabal Trail project, supported the upside.
Distribution: The segment reported year-over-year increase of 8% in EBITDA to $122.0 million from $113.0 million. The upside was mainly driven by incremental earnings from the 2015 Dawn-Parkway expansion project and colder weather.
Western Canada Transmission & Processing: The segment recorded an EBITDA of $105.0 million, down 14.6% from the year-earlier level. The downside can mainly be attributed to lower gathering and processing revenues.
Field Services: Spectra Energy reported that the 50% it owns of the Field Services segment incurred loss of $5 million in the fourth quarter. This is much narrower than a loss of $36 million in the year-ago quarter. Favorable contract realignment efforts, stronger commodity prices and asset growth contributed to the improvement.
Production and Price Realizations
The company produced NGLs of 371 thousand barrels per day (MBbl/d) compared with the year-ago quarter level of 409 MBbl/d. Price of NGLs increased 31% and averaged $0.55 per gallon, while crude oil costs were up 16.5% and averaged approximately $49.15 per barrel, both on a year-over-year basis. Natural gas was sold at $2.98 per million British thermal units (MMBtu) as against $2.27 per MMBtu in the fourth quarter of 2015.
Balance Sheet
As of Dec 31, 2016, Spectra Energy had long-term debt of approximately $13.6 billion with a debt-to-capitalization ratio of 54.1% compared with 55.9% in the preceding quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimate. There has been one revision higher for the current quarter. In the past month, the consensus estimate has shifted by 19.3% due to these changes.
Sea Limited Sponsored ADR Price and Consensus
At this time, SE has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision indicates a downward shift. Notably, SE has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Sea Limited (SE) Down 11.3% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Sea Limited Sponsored ADR (SE - Free Report) . Shares have lost about 11.3% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is SE due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fourth-Quarter 2016 Results
Premier natural gas company Spectra Energy Corp. reported fourth-quarter 2016 earnings per share from continuing operations of $0.28, which lagged the Zacks Consensus Estimate of $0.33. The bottom line remained flat on a year-over-year basis. The decline is mainly attributable to lackluster performance of Western Canada Transmission & Processing and Field Services segment.
The company’s operating revenues of $1,298 million fell 1.4% from the year-ago level of $1,316 million and also came in below the Zacks Consensus Estimate of $1,426 million.
Full-year 2016 earnings of $1.19 per share lagged the Zacks Consensus Estimate of $1.20. Enbridge Energy Partners posted earnings of $1.15 per share in 2015.
Total revenue for the full year decreased to $4,916 million from $5,234 million in 2015. It also lagged the Zacks Consensus Estimate of $5,098.0 million.
Operational Analysis
Spectra Energy Partners: The segment posted quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) of $537.0 million, up 11% from the year-ago quarter. The improvement was mainly driven by higher earnings from expansion projects commissioned in the second half of 2016 in both the natural gas transmission and liquids businesses. Also, increased Allowance for Funds Used During Construction (AFUDC), mainly from the Sabal Trail project, supported the upside.
Distribution: The segment reported year-over-year increase of 8% in EBITDA to $122.0 million from $113.0 million. The upside was mainly driven by incremental earnings from the 2015 Dawn-Parkway expansion project and colder weather.
Western Canada Transmission & Processing: The segment recorded an EBITDA of $105.0 million, down 14.6% from the year-earlier level. The downside can mainly be attributed to lower gathering and processing revenues.
Field Services: Spectra Energy reported that the 50% it owns of the Field Services segment incurred loss of $5 million in the fourth quarter. This is much narrower than a loss of $36 million in the year-ago quarter. Favorable contract realignment efforts, stronger commodity prices and asset growth contributed to the improvement.
Production and Price Realizations
The company produced NGLs of 371 thousand barrels per day (MBbl/d) compared with the year-ago quarter level of 409 MBbl/d. Price of NGLs increased 31% and averaged $0.55 per gallon, while crude oil costs were up 16.5% and averaged approximately $49.15 per barrel, both on a year-over-year basis. Natural gas was sold at $2.98 per million British thermal units (MMBtu) as against $2.27 per MMBtu in the fourth quarter of 2015.
Balance Sheet
As of Dec 31, 2016, Spectra Energy had long-term debt of approximately $13.6 billion with a debt-to-capitalization ratio of 54.1% compared with 55.9% in the preceding quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimate. There has been one revision higher for the current quarter. In the past month, the consensus estimate has shifted by 19.3% due to these changes.
Sea Limited Sponsored ADR Price and Consensus
At this time, SE has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision indicates a downward shift. Notably, SE has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.