Marathon Oil Corporation (MRO - Free Report) is set to release fourth-quarter results on Feb 15. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 82 cents per share on revenues of $1.7 billion.
Let’s delve into the factors that might have influenced the independent oil and gas producer’s performance in the December quarter. But it’s worth taking a look at MRO’s previous-quarter results first.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based upstream player beat the consensus mark on stronger liquid realizations and solid domestic production. MRO had reported adjusted earnings per share of $1.24, beating the Zacks Consensus Estimate of $1.19. Revenues of $2.2 billion generated by the firm also came in 8.6% above the Zacks Consensus Estimate.
Marathon beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 13.9%, on average. This is depicted in the graph below:
Factors to Consider
Marathon is likely to have cashed in on the strength in hydrocarbon realizations. In the previous three-month period, MRO’s key U.S. E&P segment realized average liquids prices (crude oil and condensate) of $93.67 per barrel — significantly higher than the year-earlier level of $69.40. Additionally, average realized natural gas prices were up 88% year over year to $7.84 per thousand cubic feet.
The increase in price is most likely to have continued in the to-be-reported quarter, with commodity prices remaining high on the back of geopolitical tensions, strained supply and robust demand. This price boost is likely to have buoyed the fourth-quarter revenues and cash flows of Marathon.
MRO is also expected to have benefited from higher production during the December period. In the third quarter of 2022, the company’s net production from the domestic unit averaged 295,000 barrels of oil equivalent per day (BOE/d). Considering MRO’s impressive production profile from its high-margin U.S. resource plays (Eagle Ford, Bakken, Oklahoma and Permian), the Zacks Consensus Estimate for fourth-quarter volume is pegged at some 290,000 BOE/d, indicating continued strength from the September quarter.
On a somewhat bearish note, the increase in Marathon’s costs might have dented the company’s to-be-reported bottom line. MRO’s total costs in the third quarter were $1.1 billion, $37 million higher than the prior-year period. The upward cost trajectory is likely to have continued in the third quarter due to cost inflation and higher energy prices.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Marathon Oil is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -2.86%.
Zacks Rank: MRO currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Marathon Oil, here are some firms from the energy space that you may want to consider on the basis of our model:
Sunoco LP (SUN - Free Report) has an Earnings ESP of +1.95% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 15.
Sunoco beat the Zacks Consensus Estimate for earnings in two of the last four quarters. It has a trailing four-quarter earnings surprise of 28.8%, on average. Valued at around $4.7 billion, SUN has gained 6.2% in a year.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Antero Midstream Corporation (AM - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 15.
For 2023, Antero Midstream has a projected earnings growth rate of 5.9%. Valued at around $5.1 billion, AM has gained 5.8% in a year.
Cheniere Energy (LNG - Free Report) has an Earnings ESP of +18.82% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 23.
For 2023, LNG has a projected earnings growth rate of 539.1%. Valued at around $37 billion, NOV has gained 27.3% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s an American AI company that’s riding low right now, but it has rounded up clients like BMW, GE, Dell Computer, and Bosch. It has prospects for not just doubling but quadrupling in the year to come. Of course, all our picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock And 4 Runners Up
Marathon Oil Corporation (MRO - Free Report) is set to release fourth-quarter results on Feb 15. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 82 cents per share on revenues of $1.7 billion.
Let’s delve into the factors that might have influenced the independent oil and gas producer’s performance in the December quarter. But it’s worth taking a look at MRO’s previous-quarter results first.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based upstream player beat the consensus mark on stronger liquid realizations and solid domestic production. MRO had reported adjusted earnings per share of $1.24, beating the Zacks Consensus Estimate of $1.19. Revenues of $2.2 billion generated by the firm also came in 8.6% above the Zacks Consensus Estimate.
Marathon beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 13.9%, on average. This is depicted in the graph below:
Factors to Consider
Marathon is likely to have cashed in on the strength in hydrocarbon realizations. In the previous three-month period, MRO’s key U.S. E&P segment realized average liquids prices (crude oil and condensate) of $93.67 per barrel — significantly higher than the year-earlier level of $69.40. Additionally, average realized natural gas prices were up 88% year over year to $7.84 per thousand cubic feet.
The increase in price is most likely to have continued in the to-be-reported quarter, with commodity prices remaining high on the back of geopolitical tensions, strained supply and robust demand. This price boost is likely to have buoyed the fourth-quarter revenues and cash flows of Marathon.
MRO is also expected to have benefited from higher production during the December period. In the third quarter of 2022, the company’s net production from the domestic unit averaged 295,000 barrels of oil equivalent per day (BOE/d). Considering MRO’s impressive production profile from its high-margin U.S. resource plays (Eagle Ford, Bakken, Oklahoma and Permian), the Zacks Consensus Estimate for fourth-quarter volume is pegged at some 290,000 BOE/d, indicating continued strength from the September quarter.
On a somewhat bearish note, the increase in Marathon’s costs might have dented the company’s to-be-reported bottom line. MRO’s total costs in the third quarter were $1.1 billion, $37 million higher than the prior-year period. The upward cost trajectory is likely to have continued in the third quarter due to cost inflation and higher energy prices.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Marathon Oil is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -2.86%.
Zacks Rank: MRO currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Marathon Oil, here are some firms from the energy space that you may want to consider on the basis of our model:
Sunoco LP (SUN - Free Report) has an Earnings ESP of +1.95% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 15.
Sunoco beat the Zacks Consensus Estimate for earnings in two of the last four quarters. It has a trailing four-quarter earnings surprise of 28.8%, on average. Valued at around $4.7 billion, SUN has gained 6.2% in a year.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Antero Midstream Corporation (AM - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 15.
For 2023, Antero Midstream has a projected earnings growth rate of 5.9%. Valued at around $5.1 billion, AM has gained 5.8% in a year.
Cheniere Energy (LNG - Free Report) has an Earnings ESP of +18.82% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 23.
For 2023, LNG has a projected earnings growth rate of 539.1%. Valued at around $37 billion, NOV has gained 27.3% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s an American AI company that’s riding low right now, but it has rounded up clients like BMW, GE, Dell Computer, and Bosch. It has prospects for not just doubling but quadrupling in the year to come. Of course, all our picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock And 4 Runners Up
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