Saturday, February 2, 2013

Does The Street Have Tesoro Figured Out?

Tesoro (NYSE: TSO  ) is expected to report Q4 earnings on Feb. 6. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Tesoro's revenues will drop -8.5% and EPS will contract -258.4%.

The average estimate for revenue is $7.06 billion. On the bottom line, the average EPS estimate is $1.41.

Revenue details
Last quarter, Tesoro logged revenue of $8.78 billion. GAAP reported sales were 7.9% higher than the prior-year quarter's $8.00 billion.

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

EPS details
Last quarter, non-GAAP EPS came in at $2.05. GAAP EPS of $1.92 for Q3 were 20% lower than the prior-year quarter's $2.39 per share.

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

Recent performance
For the preceding quarter, gross margin was 8.7%, 60 basis points worse than the prior-year quarter. Operating margin was 5.9%, 160 basis points worse than the prior-year quarter. Net margin was 3.2%, 110 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $31.37 billion. The average EPS estimate is $6.81.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 931 members out of 995 rating the stock outperform, and 64 members rating it underperform. Among 298 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 276 give Tesoro a green thumbs-up, and 22 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Tesoro is outperform, with an average price target of $49.71.

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