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The Gory Details on Southern Copper's Double Fumble

Wednesday - 7/24/2013, 2:00am  ET

Southern Copper reported earnings on July 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Southern Copper missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue contracted significantly. GAAP earnings per share dropped significantly.

Margins contracted across the board.

Revenue details
Southern Copper recorded revenue of $1.41 billion. The seven analysts polled by S&P Capital IQ anticipated revenue of $1.49 billion on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $1.66 billion.

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

EPS details
EPS came in at $0.44. The seven earnings estimates compiled by S&P Capital IQ predicted $0.47 per share. GAAP EPS of $0.44 for Q2 were 33% lower than the prior-year quarter's $0.66 per share.

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

Margin details
For the quarter, gross margin was 49.5%, much worse than the prior-year quarter. Operating margin was 40.1%, much worse than the prior-year quarter. Net margin was 26.4%, 760 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.47 billion. On the bottom line, the average EPS estimate is $0.45.

Next year's average estimate for revenue is $6.16 billion. The average EPS estimate is $2.01.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,134 members out of 4,303 rating the stock outperform, and 169 members rating it underperform. Among 757 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 726 give Southern Copper a green thumbs-up, and 31 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Southern Copper is hold, with an average price target of $36.88.

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This article was originally published as The Gory Details on Southern Copper's Double Fumbleon Fool.com

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