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Ohio-based independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Analyst Report) is set to release first-quarter 2014 results before the opening bell on May 1, 2014. Last quarter, the company posted an earnings surprise of 79.49%. Let’s see how things are shaping up for this announcement.

Factors to Influence This Quarter

Marathon Petroleum is the fourth largest domestic refiner with a combined crude oil processing capacity of approximately 1.7 million barrels per day through its portfolio of seven refineries. A major advantage for the company is its proprietary access to pipelines, which inhibits low-cost competitors from supplying products in Marathon Petroleum's key markets.  

Moreover, the fundamentals of the company look good. Marathon Petroleum is in excellent financial health, with over $2 billion in cash/cash equivalents and an investment-grade credit rating with a debt-to-capitalization ratio of 23%.  

Marathon Petroleum’s total expenses have increased considerably in fourth-quarter 2013, which is a matter of concern. The company’s total costs came in at$23.9 billion, representing a substantial hike of 22.5% as compared to the year-ago quarter.  The company’s results may get hampered if expenses continue to rise at this rate.  

Earnings Whispers

Our proven model does not conclusively show that Marathon Petroleum is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below.  

Zero Zacks ESP:This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at $1.05. This leads to an ESP of 0.00% for Marathon Petroleum.

Zacks Rank #3 (Hold): Marathon Petroleum’s Zacks Rank #3 increases the predictive power of ESP, but when combined with a zero ESP , it makes surprise prediction difficult.

We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into an earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

Callon Petroleum Co. (CPE - Snapshot Report) with Earnings ESP of +25.00% and Zacks Rank #2 (Buy). The company is slated to release first-quarter earnings on May 8.

Canadian Natural Resources Ltd. (CNQ - Analyst Report) with Earnings ESP of +8.22% and Zacks Rank #2. The company is likely to release earnings after the closing bell on May 8.

Abraxas Petroleum Corp. (AXAS - Snapshot Report) with Earnings ESP of +20.00% and Zacks Rank #2. The company is scheduled to release earnings on May 8.

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