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Why Is Murphy Oil (MUR) Down 1.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Murphy Oil (MUR - Free Report) . Shares have lost about 1.9% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Murphy Oil 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 drivers.

Murphy Oil Beats Q1 Earnings and Revenue Estimates

Murphy Oil reported first-quarter 2019 adjusted earnings of 15 cents per share, which beat the Zacks Consensus Estimate of 10 cents by 50%. However, the bottom line declined from the year-ago quarter’s level of 96 cents. On a GAAP basis, net income was 23 cents.

Revenues

In the quarter, Murphy Oil generated revenues of $591 million, which beat the Zacks Consensus Estimate of $546 million by 8.2%. The top line increased 57.7% on a year-over-year basis.

Operational Highlights

On Mar 21, 2019, the company announced the divestiture of its Malaysia assets for $2.127 billion cash. The operation will be reported as discontinued from the first quarter.

The company produced 148,000 barrels of oil equivalent per day (boe/d) in the first quarter   from continuing operations.

Murphy Oil’s total costs and expenses amounted to $506.4 million, up 42.2% from $355.8 million in the year-ago quarter.

Operating income from continuing operations came in at $84.5 million, higher than $18. 9 million in the prior-year quarter.  

The company incurred interest charges of $46.1 million, up from $44.5 million in the prior-year quarter.

Financial Condition

Murphy Oil had cash and cash equivalents of $286.3 million as of Mar 31, 2019 compared with $359.9 million as of Dec 31, 2018.

Net cash provided by continuing operations activities in the first quarter was $217.2 million, higher than $110.8 million in the year-ago quarter.

Guidance

Murphy Oil expects net production including non-controlling interest for second-quarter 2019 in the range of 155,000-159,000 boe/d.

The company expects 2019 capital expenditure budget in the range of $1.15- $1.35 billion.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted 30.66% due to these changes.

VGM Scores

Currently, Murphy Oil has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Murphy Oil has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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