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Marathon (MRO) to Report Q3 Earnings: What's in Store?
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Marathon Oil Corporation (MRO - Free Report) is set to release third-quarter results on Nov 2. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.19 per share on revenues of $2.1 billion.
Let’s delve into the factors that might have influenced the independent oil and gas producer’s performance in the September quarter. But it’s worth taking a look at MRO’s previous-quarter results first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based upstream player beat the consensus mark on stronger liquid realizations and solid domestic production. MRO had reported adjusted earnings per share of $1.32, beating the Zacks Consensus Estimate of $1.23. Revenues of $2.3 billion generated by the firm also came in 9.9% above the Zacks Consensus Estimate.
Marathon beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 19.3%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the third-quarter bottom line has remained the same in the last seven days. The estimated figure indicates a 205.1% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 42.5% increase from the year-ago period.
Factors to Consider
Marathon is likely to have cashed in on the strength in hydrocarbon realizations. In the previous three-month period, MRO’s key U.S. E&P segment realized average liquids prices (crude oil and condensate) of $110.10 per barrel — significantly above the year-earlier level of $64.73. Additionally, average realized natural gas prices were up 162.1% year over year to $6.84 per thousand cubic feet. The increase in price is most likely to have continued in the to-be-reported quarter, with commodity prices remaining high on the back of geopolitical tensions, strained supply and robust demand. This price boost is likely to have buoyed the third-quarter revenues and cash flows of Marathon.
MRO is also expected to have benefited from higher production during the September period. In the second quarter of 2022, the company’s net production from the domestic unit averaged 283,000 barrels of oil equivalent per day (BOE/d). Considering MRO’s impressive production profile from its high-margin U.S. resource plays (Eagle Ford, Bakken, Oklahoma and Permian), the Zacks Consensus Estimate for third-quarter volume is pegged at 289,000 BOE/d, indicating an increase of 2.1% from the June quarter.
On a somewhat bearish note, the increase in Marathon’s costs might have dented the company’s to-be-reported bottom line. MRO’s production costs in the second quarter increased around 30.2% year over year to $164 million. The upward cost trajectory is likely to have continued in the third quarter due to cost inflation and higher energy prices.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Marathon Oil is likely to beat estimates in the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -0.50%.
Zacks Rank: MRO currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Marathon Oil, here are some firms from the energy space that you may want to consider on the basis of our model:
Cactus, Inc. (WHD - Free Report) has an Earnings ESP of +2.74% and a Zacks Rank #1. The firm is scheduled to release earnings on Nov 7.
For 2022, Cactus has a projected earnings growth rate of 144.4%. Valued at around $3.9 billion, WHD has gained 15% in a year.
Murphy Oil Corporation (MUR - Free Report) has an Earnings ESP of +0.79% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 3.
Murphy Oil topped the Zacks Consensus Estimate by an average of 27.1% in the trailing four quarters, including a 35.9% beat in Q2. Valued at around $7.4 billion, MUR has gained 64.2% in a year.
Canadian Natural Resources Limited (CNQ - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 3.
For 2022, Canadian Natural Resources has a projected earnings growth rate of 75.8%. Valued at around $66.4 billion, CNQ has gained 38.4% in a year.
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Marathon (MRO) to Report Q3 Earnings: What's in Store?
Marathon Oil Corporation (MRO - Free Report) is set to release third-quarter results on Nov 2. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.19 per share on revenues of $2.1 billion.
Let’s delve into the factors that might have influenced the independent oil and gas producer’s performance in the September quarter. But it’s worth taking a look at MRO’s previous-quarter results first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based upstream player beat the consensus mark on stronger liquid realizations and solid domestic production. MRO had reported adjusted earnings per share of $1.32, beating the Zacks Consensus Estimate of $1.23. Revenues of $2.3 billion generated by the firm also came in 9.9% above the Zacks Consensus Estimate.
Marathon beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 19.3%, on average. This is depicted in the graph below:
Marathon Oil Corporation Price and EPS Surprise
Marathon Oil Corporation price-eps-surprise | Marathon Oil Corporation Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the third-quarter bottom line has remained the same in the last seven days. The estimated figure indicates a 205.1% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 42.5% increase from the year-ago period.
Factors to Consider
Marathon is likely to have cashed in on the strength in hydrocarbon realizations. In the previous three-month period, MRO’s key U.S. E&P segment realized average liquids prices (crude oil and condensate) of $110.10 per barrel — significantly above the year-earlier level of $64.73. Additionally, average realized natural gas prices were up 162.1% year over year to $6.84 per thousand cubic feet. The increase in price is most likely to have continued in the to-be-reported quarter, with commodity prices remaining high on the back of geopolitical tensions, strained supply and robust demand. This price boost is likely to have buoyed the third-quarter revenues and cash flows of Marathon.
MRO is also expected to have benefited from higher production during the September period. In the second quarter of 2022, the company’s net production from the domestic unit averaged 283,000 barrels of oil equivalent per day (BOE/d). Considering MRO’s impressive production profile from its high-margin U.S. resource plays (Eagle Ford, Bakken, Oklahoma and Permian), the Zacks Consensus Estimate for third-quarter volume is pegged at 289,000 BOE/d, indicating an increase of 2.1% from the June quarter.
On a somewhat bearish note, the increase in Marathon’s costs might have dented the company’s to-be-reported bottom line. MRO’s production costs in the second quarter increased around 30.2% year over year to $164 million. The upward cost trajectory is likely to have continued in the third quarter due to cost inflation and higher energy prices.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Marathon Oil is likely to beat estimates in the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -0.50%.
Zacks Rank: MRO currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Marathon Oil, here are some firms from the energy space that you may want to consider on the basis of our model:
Cactus, Inc. (WHD - Free Report) has an Earnings ESP of +2.74% and a Zacks Rank #1. The firm is scheduled to release earnings on Nov 7.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2022, Cactus has a projected earnings growth rate of 144.4%. Valued at around $3.9 billion, WHD has gained 15% in a year.
Murphy Oil Corporation (MUR - Free Report) has an Earnings ESP of +0.79% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 3.
Murphy Oil topped the Zacks Consensus Estimate by an average of 27.1% in the trailing four quarters, including a 35.9% beat in Q2. Valued at around $7.4 billion, MUR has gained 64.2% in a year.
Canadian Natural Resources Limited (CNQ - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 3.
For 2022, Canadian Natural Resources has a projected earnings growth rate of 75.8%. Valued at around $66.4 billion, CNQ has gained 38.4% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.