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What's in the Cards for Marathon Oil (MRO) in Q3 Earnings?
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Leading upstream energy firm Marathon Oil Corp. (MRO - Free Report) is set to release third-quarter 2016 results after the closing bell on Wednesday, Nov 2.
In the preceding three-month period, the Houston, TX-based company delivered a positive earnings surprise of 4.17%.The better-than-expected results was driven by the company’s cost-control initiatives.
As far as the earnings surprise history is concerned, the company has an excellent record. Marathon Oil beat estimates in each of the last four quarters with an average positive surprise of 17.27%.
Let’s see how things are shaping up for this announcement.
Factors to Consider This Quarter
Marathon Oil is a leading energy firm with a large and geographically diverse reserve base and solid project pipeline. Additionally, its healthy balance sheet helps it to capitalize on investment opportunities. We expect such factors to have a positive impact on the upcoming earnings.
Marathon Oil’s strategic initiatives such as cost reduction, exercise of capital discipline, efficiency gains and consistent execution of projects have had a positive impact on the company’s financials. The positives are reflected in the company’s narrower-than-expected second-quarter loss. The improving trend is likely to continue in the third quarter as well.
Moreover, the company’s total quarterly cost and expenses decreased 22% to $1,454 million in the last quarter. We expect the company to perform well on the cost front in the to-be-reported quarter as well.
However, Marathon Oil’s decision to cut its capital expenditure by half will lead to production decline. Though exploration expenses will be limited, the company will only spend on completing existing projects, internationally.
Despite recovering from multi-year lows, both oil and natural gas prices are below year-ago levels. This is likely to adversely affect the company’s profitability.
Earnings Whispers
Our proven model does not conclusively show that Marathon Oil will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at a loss of 19 cents. Please check our Earnings ESP Filterthat enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: MarathonOil has a Zacks Rank #3. Though a Zacks Rank #3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
While earnings beat looks uncertain for Marathon Oil, here are some domestic upstream you may want to consider on the basis of our model, which shows that they have the right combination of elements to post earnings beat this quarter:
CONE Midstream Partners LP is expected to release third-quarter earnings results on Nov 4. The partnership has an Earnings ESP of +2.70% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
CSI Compressco LP has an Earnings ESP of +27.27% and a Zacks Rank #3. The company is anticipated to release third-quarter earnings on Nov 4.
Archrock Partners, L.P. has an Earnings ESP of +8.33% and a Zacks Rank #1. The company is likely to release third-quarter earnings on Nov 1.
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What's in the Cards for Marathon Oil (MRO) in Q3 Earnings?
Leading upstream energy firm Marathon Oil Corp. (MRO - Free Report) is set to release third-quarter 2016 results after the closing bell on Wednesday, Nov 2.
In the preceding three-month period, the Houston, TX-based company delivered a positive earnings surprise of 4.17%.The better-than-expected results was driven by the company’s cost-control initiatives.
As far as the earnings surprise history is concerned, the company has an excellent record. Marathon Oil beat estimates in each of the last four quarters with an average positive surprise of 17.27%.
Let’s see how things are shaping up for this announcement.
Factors to Consider This Quarter
Marathon Oil is a leading energy firm with a large and geographically diverse reserve base and solid project pipeline. Additionally, its healthy balance sheet helps it to capitalize on investment opportunities. We expect such factors to have a positive impact on the upcoming earnings.
Marathon Oil’s strategic initiatives such as cost reduction, exercise of capital discipline, efficiency gains and consistent execution of projects have had a positive impact on the company’s financials. The positives are reflected in the company’s narrower-than-expected second-quarter loss. The improving trend is likely to continue in the third quarter as well.
MARATHON OIL CP Price and EPS Surprise
MARATHON OIL CP Price and EPS Surprise | MARATHON OIL CP Quote
Moreover, the company’s total quarterly cost and expenses decreased 22% to $1,454 million in the last quarter. We expect the company to perform well on the cost front in the to-be-reported quarter as well.
However, Marathon Oil’s decision to cut its capital expenditure by half will lead to production decline. Though exploration expenses will be limited, the company will only spend on completing existing projects, internationally.
Despite recovering from multi-year lows, both oil and natural gas prices are below year-ago levels. This is likely to adversely affect the company’s profitability.
Earnings Whispers
Our proven model does not conclusively show that Marathon Oil will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at a loss of 19 cents. Please check our Earnings ESP Filterthat enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: MarathonOil has a Zacks Rank #3. Though a Zacks Rank #3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
While earnings beat looks uncertain for Marathon Oil, here are some domestic upstream you may want to consider on the basis of our model, which shows that they have the right combination of elements to post earnings beat this quarter:
CONE Midstream Partners LP is expected to release third-quarter earnings results on Nov 4. The partnership has an Earnings ESP of +2.70% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
CSI Compressco LP has an Earnings ESP of +27.27% and a Zacks Rank #3. The company is anticipated to release third-quarter earnings on Nov 4.
Archrock Partners, L.P. has an Earnings ESP of +8.33% and a Zacks Rank #1. The company is likely to release third-quarter earnings on Nov 1.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>