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Murphy Oil (MUR) Down 3.4% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Murphy Oil (MUR - Free Report) . Shares have lost about 3.4% in that time frame, underperforming 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 catalysts.

Murphy Oil Beats Q2 Earnings and Revenue Estimates

Murphy Oil Corporation reported second-quarter 2019 adjusted earnings of 21 cents per share, which beat the Zacks Consensus Estimate of 18 cents by 16.5%. The company incurred a loss of 5 cents in the year-ago quarter. On a GAAP basis, earnings were 54 cents compared with 25 cents in the year-ago quarter.

Revenues

In the quarter, Murphy Oil generated revenues of $709 million, which beat the Zacks Consensus Estimate of $606 million by 17%. The top line surged 82% on a year-over-year basis.

Highlights of the Release

In the third quarter, the company completed the divestiture of its Malaysia assets, which generated cash proceeds worth $2 billion.

The company closed a deep water Gulf of Mexico transaction for net cash consideration of $1.2 billion.

The company produced 159,000 barrels of oil equivalent per day (boe/d) in the second quarter   from continuing operations.

Murphy Oil’s total costs and expenses amounted to $538 million, up 46.6% from $367.1 million in the year-ago quarter.

Operating income from continuing operations came in at $171 million, higher than $22.5 million in the prior-year quarter.  

The company incurred interest charges of $54.1 million, up from $44.3 million in the prior-year quarter.

Financial Condition

Murphy Oil had cash and cash equivalents of $326 million as of Jun 30, 2019 compared with $792.7 million as of Jun 30, 2018.

Net cash provided by continuing operations activities in the second quarter was $438.2 million, higher than $220.8 million in the year-ago quarter.

Guidance

Murphy Oil expects net production including non-controlling interest for third-quarter 2019 in the range of 192,000-196,000 boe/d.

The company expects 2019 capital expenditure budget in the range of $1.35- $1.45 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month. The consensus estimate has shifted -10.77% due to these changes.

VGM Scores

Currently, Murphy Oil has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, 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

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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