We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Marathon Oil (MRO) Up 17.7% Since Its Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Marathon Oil Corporation (MRO - Free Report) . Shares have added about 17.7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MRO due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter 2018 Results
Marathon Oil posted first-quarter adjusted income of 18 cents per share, turning around from the year-ago quarter’s loss of 7 cents. The bottom line was also ahead of the Zacks Consensus Estimate of 15 cents.
The strong numbers are attributed to higher production from the U.S. E&P segment and recovery in crude prices. In particular, total quarterly output rose 20.6% year over year to 398,000 oil-equivalent barrels per day (BOE/d).
Quarterly revenues of $1,733 million comfortably beat the Zacks Consensus Estimate of $1,347 million and also rose from the prior-year quarter level of $1,072 million.
Segmental Performance
United States E&P: Marathon Oil’s United States upstream segment reported a profit of $125 million, turning around from the loss of $79 million a year ago. Higher oil prices and production improved the results.
Marathon Oil reported production available for sale of 284,000 BOE/d, up from 208,000 BOE/d in the first quarter of 2017. The improvement was mainly due impressive contribution from U.S. resource plays in Eagle Ford, Bakken, Oklahoma and Northern Delaware.
The company realized liquids (crude oil and condensate) price of $62.22 per barrel, 28.4% higher than the year-earlier quarter’s level of $48.46 per barrel. Natural gas liquids price realizations also witnessed a year-over-year increase of 18.7% to stand at $22.95 a barrel. However, natural gas realizations decreased 14.2% year over year to $2.59 per thousand cubic feet (Mcf).
International E&P: The segment’s income increased 42% from the prior-year quarter to $132 million. Substantially higher liquids realizations led to the profit growth.
Marathon Oil reported production available for sale (excluding Libya) of 114,000 BOE/d, down from 122,000 BOE/d in the first quarter of 2017. The decrease in output could be blamed on planned turnaround activity in Equatorial Guinea.
The company realized liquids (crude oil and condensate) price of $66.23 per barrel, reflecting a 31.4% rise from the year-earlier quarter’s level of $50.41 per barrel. Also, natural gas realizations were up 18.2% year over year to 65 cents per thousand cubic feet (Mcf). However, natural gas liquids realizations fell to $1.83 a barrel compared with $3.86 per barrel in the first quarter of 2017.
Costs & Expenses
The company’s exploration expenses in the quarter came in at $52 million, higher than $28 million in the year-earlier quarter. Moreover, Marathon Oil’s total quarterly cost and expenses rose 16.1% to 1,161 million compared with the prior-year quarter.
Capex & Balance sheet
During the quarter, Marathon Oil’s capex stood at $618 million. As of Mar 31, 2018, Marathon Oil had cash and cash equivalents of $2,490 million and long-term debt of around $5,723 million. Debt-to-capitalization ratio of the company was 31.2%.
Guidance
Marathon Oil expects second-quarter 2018 United States E&P output available for sale in the range of 270,000-280,000 BOE/d and International E&P output within 115,000-125,000 BOE/d.
For the full year, Marathon Oil forecasts 25-30% annual growth in U.S. shale plays, up from the prior guidance of 20-25%. Full-year capital expenditure budget remains intact at $2.3 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been six revisions higher for the current quarter.
At this time, MRO has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 growth and momentum investors than value investors.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. Notably, MRO has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Marathon Oil (MRO) Up 17.7% Since Its Last Earnings Report?
It has been about a month since the last earnings report for Marathon Oil Corporation (MRO - Free Report) . Shares have added about 17.7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MRO due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter 2018 Results
Marathon Oil posted first-quarter adjusted income of 18 cents per share, turning around from the year-ago quarter’s loss of 7 cents. The bottom line was also ahead of the Zacks Consensus Estimate of 15 cents.
The strong numbers are attributed to higher production from the U.S. E&P segment and recovery in crude prices. In particular, total quarterly output rose 20.6% year over year to 398,000 oil-equivalent barrels per day (BOE/d).
Quarterly revenues of $1,733 million comfortably beat the Zacks Consensus Estimate of $1,347 million and also rose from the prior-year quarter level of $1,072 million.
Segmental Performance
United States E&P: Marathon Oil’s United States upstream segment reported a profit of $125 million, turning around from the loss of $79 million a year ago. Higher oil prices and production improved the results.
Marathon Oil reported production available for sale of 284,000 BOE/d, up from 208,000 BOE/d in the first quarter of 2017. The improvement was mainly due impressive contribution from U.S. resource plays in Eagle Ford, Bakken, Oklahoma and Northern Delaware.
The company realized liquids (crude oil and condensate) price of $62.22 per barrel, 28.4% higher than the year-earlier quarter’s level of $48.46 per barrel. Natural gas liquids price realizations also witnessed a year-over-year increase of 18.7% to stand at $22.95 a barrel. However, natural gas realizations decreased 14.2% year over year to $2.59 per thousand cubic feet (Mcf).
International E&P: The segment’s income increased 42% from the prior-year quarter to $132 million. Substantially higher liquids realizations led to the profit growth.
Marathon Oil reported production available for sale (excluding Libya) of 114,000 BOE/d, down from 122,000 BOE/d in the first quarter of 2017. The decrease in output could be blamed on planned turnaround activity in Equatorial Guinea.
The company realized liquids (crude oil and condensate) price of $66.23 per barrel, reflecting a 31.4% rise from the year-earlier quarter’s level of $50.41 per barrel. Also, natural gas realizations were up 18.2% year over year to 65 cents per thousand cubic feet (Mcf). However, natural gas liquids realizations fell to $1.83 a barrel compared with $3.86 per barrel in the first quarter of 2017.
Costs & Expenses
The company’s exploration expenses in the quarter came in at $52 million, higher than $28 million in the year-earlier quarter. Moreover, Marathon Oil’s total quarterly cost and expenses rose 16.1% to 1,161 million compared with the prior-year quarter.
Capex & Balance sheet
During the quarter, Marathon Oil’s capex stood at $618 million. As of Mar 31, 2018, Marathon Oil had cash and cash equivalents of $2,490 million and long-term debt of around $5,723 million. Debt-to-capitalization ratio of the company was 31.2%.
Guidance
Marathon Oil expects second-quarter 2018 United States E&P output available for sale in the range of 270,000-280,000 BOE/d and International E&P output within 115,000-125,000 BOE/d.
For the full year, Marathon Oil forecasts 25-30% annual growth in U.S. shale plays, up from the prior guidance of 20-25%. Full-year capital expenditure budget remains intact at $2.3 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been six revisions higher for the current quarter.
Marathon Oil Corporation Price and Consensus
Marathon Oil Corporation Price and Consensus | Marathon Oil Corporation Quote
VGM Scores
At this time, MRO has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 growth and momentum investors than value investors.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. Notably, MRO has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.