Marathon Oil Corporation (MRO - Free Report) reported second-quarter 2023 adjusted net income per share of 48 cents, beating the Zacks Consensus Estimate of 43 cents. The outperformance reflects strong domestic oil and gas production.
However, the company’s bottom line fell from the year-ago adjusted profit of $1.32 due to weaker oil realizations and higher production costs in the United States.
The company reported revenues of $1.5 billion, which came 0.4% above the consensus mark but fell 34.3% from the year-ago sales of $2.3 billion.
Financial Position
Total costs in the quarter were $1.1 billion, $50 million higher than the prior-year period and marginally above our expectations. Marathon Oil reported an adjusted operating cash flow of $1.1 billion for the second quarter, down 29.3% from a year ago.
As of Jun 30, 2023, it had cash and cash equivalents worth $215 million and long-term debt of 5.7 billion. The debt-to-capitalization ratio of the company was 34.2.
Marathon Oil spent $623 million in capital and exploratory expenditures during the quarter and raked in $531 million in adjusted free cash flow. The company also executed $372 million in share repurchases during the period.
2023 Guidance
Marathon has maintained its budgeted capital spending between $1.9 billion and $2 billion this year. Meanwhile, MRO continues to prioritize shareholder returns over production growth. The company is targeting production in the range of 385,000 BOE/d to 405,000 BOE/d, up more than 15% (at the midpoint) from last year. Further, Marathon expects oil volumes in the band of 185,000-195,000 barrels per day. Assuming $80 WTI, Marathon Oil expects to return a minimum of 40% of its cash flow from operations.
Zacks Rank & Key Picks
Marathon — a leading upstream oil and gas company — carries a Zacks Rank #3 (Hold) at present.
Meanwhile, investors interested in the energy sector might look at operators like Solaris Oilfield Infrastructure (SOI - Free Report) , Murphy USA (MUSA - Free Report) and CVR Energy (CVI - Free Report) . Each of these companies has a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Solaris Oilfield Infrastructure: SOI beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters at an average of 18.8%.
SOI is valued at around $485.62 million. Solaris Oilfield Infrastructure has seen its shares inch up 1.4% in a year.
Murphy USA: Murphy USA beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. MUSA has a trailing four-quarter earnings surprise of 5.1%, on average.
Murphy USA is valued at around $6.6 billion. MUSA has seen its shares gain 7% in a year.
CVR Energy: CVI beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. Over the past 30 days, CVR Energy saw the Zacks Consensus Estimate for 2023 move up 22.9%.
CVR Energy is valued at around $3.8 billion. CVI has seen its shares gain 16.8% in a year.
4 Oil Stocks with Massive Upsides
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Marathon Oil Corporation (MRO - Free Report) reported second-quarter 2023 adjusted net income per share of 48 cents, beating the Zacks Consensus Estimate of 43 cents. The outperformance reflects strong domestic oil and gas production.
However, the company’s bottom line fell from the year-ago adjusted profit of $1.32 due to weaker oil realizations and higher production costs in the United States.
The company reported revenues of $1.5 billion, which came 0.4% above the consensus mark but fell 34.3% from the year-ago sales of $2.3 billion.
Financial Position
Total costs in the quarter were $1.1 billion, $50 million higher than the prior-year period and marginally above our expectations. Marathon Oil reported an adjusted operating cash flow of $1.1 billion for the second quarter, down 29.3% from a year ago.
As of Jun 30, 2023, it had cash and cash equivalents worth $215 million and long-term debt of 5.7 billion. The debt-to-capitalization ratio of the company was 34.2.
Marathon Oil spent $623 million in capital and exploratory expenditures during the quarter and raked in $531 million in adjusted free cash flow. The company also executed $372 million in share repurchases during the period.
2023 Guidance
Marathon has maintained its budgeted capital spending between $1.9 billion and $2 billion this year. Meanwhile, MRO continues to prioritize shareholder returns over production growth. The company is targeting production in the range of 385,000 BOE/d to 405,000 BOE/d, up more than 15% (at the midpoint) from last year. Further, Marathon expects oil volumes in the band of 185,000-195,000 barrels per day. Assuming $80 WTI, Marathon Oil expects to return a minimum of 40% of its cash flow from operations.
Zacks Rank & Key Picks
Marathon — a leading upstream oil and gas company — carries a Zacks Rank #3 (Hold) at present.
Meanwhile, investors interested in the energy sector might look at operators like Solaris Oilfield Infrastructure (SOI - Free Report) , Murphy USA (MUSA - Free Report) and CVR Energy (CVI - Free Report) . Each of these companies has a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Solaris Oilfield Infrastructure: SOI beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters at an average of 18.8%.
SOI is valued at around $485.62 million. Solaris Oilfield Infrastructure has seen its shares inch up 1.4% in a year.
Murphy USA: Murphy USA beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. MUSA has a trailing four-quarter earnings surprise of 5.1%, on average.
Murphy USA is valued at around $6.6 billion. MUSA has seen its shares gain 7% in a year.
CVR Energy: CVI beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. Over the past 30 days, CVR Energy saw the Zacks Consensus Estimate for 2023 move up 22.9%.
CVR Energy is valued at around $3.8 billion. CVI has seen its shares gain 16.8% in a year.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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