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Why Is Murphy Oil (MUR) Down 8.7% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Murphy Oil Corporation (MUR - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Murphy Oil Posts Narrower-than-Expected Loss in Q4
Murphy Oilreported fourth-quarter 2016 loss of $0.16 per share, narrower than the Zacks Consensus Estimate of a loss of $0.19 and the year-ago quarter’s loss of $0.76. The improvement was primarily driven by the recovery in realized sales prices.
On a GAAP basis, net loss per share was $0.37, compared with a loss of $3.41 a year ago. The variance between the adjusted and GAAP figures was primarily due to mark-to-market loss on crude oil derivative contracts, foreign exchange gains and redetermination expenses.
For the full year, Murphy Oil’s adjusted loss per share of $1.34 was narrower than the Zacks Consensus Estimate of a loss of $1.36. The company had incurred a loss of $3.08 last year.
Reported annual GAAP loss per share was $1.60, compared with a loss of $13.03 in 2015.
Revenues
In the quarter under review, Murphy Oil’s revenues came in at $505.8 million, beating the Zacks Consensus Estimate of $490 million by 3.2%. However, on a year-over-year basis, revenues declined 23.1% mainly due to lower exploration and production revenues from the U.S. and global operations.
The company’s 2016 revenues of $1.87 billion decreased around 38.3% from $3.03 billion a year ago.
Quarterly Highlights
Murphy Oil produced 168,000 barrels of oil equivalent per day (BOE/d) in the fourth quarter, above the guided range of 162,000–164,000 BOE/d. The upside in production was owing to shorter downtime and improved well performance following the planned Kikeh and Sarawak turnarounds, in addition to stronger results from new wells brought online in the Catarina area of the Eagle Ford Shale. In 2016, the company’s total volumes stood at 176,000 BOE/d.
Total net hydrocarbon sales volume was 168,679 BOE/d in the quarter, down 18.5% from 207,004 BOE/d a year ago.
Murphy Oil’s total costs and expenses contracted 55% year over year from $1,304.5 million to 585.9 million.
The company spent $45.3 million as interest expenses, up 38.5% from $32.7 million a year ago.
Financial Condition
Murphy Oil had cash and cash equivalents of $872.8 million as of Dec 31, 2016, compared with $283.2 million as of Dec 31, 2015.
Long-term debt was $2,422.7 million as of Dec 31, 2016, compared with $3,040.6 million as of Dec 31, 2015.
Net cash from operating activities in the fourth quarter was $320.4 million, remarkably higher than $86.8 million in the year-ago quarter.
In the reported quarter, the company’s total capital expenditure from continuing operations was $176.1 million compared with $518.1 million in the year-ago quarter.
Business Update
In the fourth quarter, Murphy Oil inked a deal to divest its heavy oil Seal assets to Baytex Energy Corp. for C$65 million.
This should help Murphy Oil leverage on its expertise in three unconventional onshore plays along with concentrated offshore areas.
Guidance
Murphy Oil expects first quarter and full-year 2017 total net production of 166,000–170,000 BOE/d and 162,000–168,000 BOE/d, respectively. Total net sales for first-quarter 2017 are expected in the band of 158,000-162,000 BOE/d.
The company estimates total exploration expenses of $25 million in the first quarter of 2017.
The company has a 2017 capital expenditure budget of $890 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an downward trend in fresh estimates. There has been one revision lower for the current quarter.
At this time, Murphy Oil's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #4 (Sell). We are expecting a below average from the stock in the next few months.
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Why Is Murphy Oil (MUR) Down 8.7% Since the Last Earnings Report?
A month has gone by since the last earnings report for Murphy Oil Corporation (MUR - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Murphy Oil Posts Narrower-than-Expected Loss in Q4
Murphy Oilreported fourth-quarter 2016 loss of $0.16 per share, narrower than the Zacks Consensus Estimate of a loss of $0.19 and the year-ago quarter’s loss of $0.76. The improvement was primarily driven by the recovery in realized sales prices.
On a GAAP basis, net loss per share was $0.37, compared with a loss of $3.41 a year ago. The variance between the adjusted and GAAP figures was primarily due to mark-to-market loss on crude oil derivative contracts, foreign exchange gains and redetermination expenses.
For the full year, Murphy Oil’s adjusted loss per share of $1.34 was narrower than the Zacks Consensus Estimate of a loss of $1.36. The company had incurred a loss of $3.08 last year.
Reported annual GAAP loss per share was $1.60, compared with a loss of $13.03 in 2015.
Revenues
In the quarter under review, Murphy Oil’s revenues came in at $505.8 million, beating the Zacks Consensus Estimate of $490 million by 3.2%. However, on a year-over-year basis, revenues declined 23.1% mainly due to lower exploration and production revenues from the U.S. and global operations.
The company’s 2016 revenues of $1.87 billion decreased around 38.3% from $3.03 billion a year ago.
Quarterly Highlights
Murphy Oil produced 168,000 barrels of oil equivalent per day (BOE/d) in the fourth quarter, above the guided range of 162,000–164,000 BOE/d. The upside in production was owing to shorter downtime and improved well performance following the planned Kikeh and Sarawak turnarounds, in addition to stronger results from new wells brought online in the Catarina area of the Eagle Ford Shale. In 2016, the company’s total volumes stood at 176,000 BOE/d.
Total net hydrocarbon sales volume was 168,679 BOE/d in the quarter, down 18.5% from 207,004 BOE/d a year ago.
Murphy Oil’s total costs and expenses contracted 55% year over year from $1,304.5 million to 585.9 million.
The company spent $45.3 million as interest expenses, up 38.5% from $32.7 million a year ago.
Financial Condition
Murphy Oil had cash and cash equivalents of $872.8 million as of Dec 31, 2016, compared with $283.2 million as of Dec 31, 2015.
Long-term debt was $2,422.7 million as of Dec 31, 2016, compared with $3,040.6 million as of Dec 31, 2015.
Net cash from operating activities in the fourth quarter was $320.4 million, remarkably higher than $86.8 million in the year-ago quarter.
In the reported quarter, the company’s total capital expenditure from continuing operations was $176.1 million compared with $518.1 million in the year-ago quarter.
Business Update
In the fourth quarter, Murphy Oil inked a deal to divest its heavy oil Seal assets to Baytex Energy Corp. for C$65 million.
This should help Murphy Oil leverage on its expertise in three unconventional onshore plays along with concentrated offshore areas.
Guidance
Murphy Oil expects first quarter and full-year 2017 total net production of 166,000–170,000 BOE/d and 162,000–168,000 BOE/d, respectively. Total net sales for first-quarter 2017 are expected in the band of 158,000-162,000 BOE/d.
The company estimates total exploration expenses of $25 million in the first quarter of 2017.
The company has a 2017 capital expenditure budget of $890 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an downward trend in fresh estimates. There has been one revision lower for the current quarter.
Murphy Oil Corporation Price and Consensus
Murphy Oil Corporation Price and Consensus | Murphy Oil Corporation Quote
VGM Scores
At this time, Murphy Oil's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #4 (Sell). We are expecting a below average from the stock in the next few months.