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Why Is Murphy Oil (MUR) Up 71.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for Murphy Oil (MUR - Free Report) . Shares have added about 71.2% in that time frame, outperforming the S&P 500.

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

Murphy Oil Reports Narrower-Than-Expected Q3 Loss

Murphy Oil Corporation incurred third-quarter 2020 adjusted loss of 15 cents per share, narrower than the Zacks Consensus Estimate of a loss of 19 cents. However, the company delivered earnings of 36 cents per share in the year-ago quarter.

On a GAAP basis, net loss was $1.59 against an income of $6.76 per share in the prior-year quarter.

Revenues

In the quarter under review, Murphy Oil’s revenues of $421.9 million missed the Zacks Consensus Estimate of $467 million by 9.7%. Also, the top line fell 48.4% from the prior-year quarter’s $817.1 million.

Operational Highlights

The company produced 153,000 barrels of oil equivalent per day (MBOEPD) in the third quarter comprising 56% of oil and 63% of liquids.

In the quarter under review, Murphy Oil’s total costs and expenses amounted to $699.9 million, up 18.5% from $590.6 million in the prior-year quarter.

Operating loss from continuing operations came in at $278.1 million against the operating income of $226.5 million in the prior-year quarter.
 
The company incurred interest charges of $45.2 million, up 0.6% from $44.9 million in the prior-year quarter.

Murphy Oil has hedged 45,000 barrels of oil per day (Bbl/d) at an average price of $56.42 per barrel for the remainder of 2020. It increased its 2021 crude oil hedge position with a total of 18,000 Bbl/d hedged at an average price of $43.31 per barrel.

Financial Condition

Murphy Oil had cash and cash equivalents of $219.6 million as of Sep 30, 2020 compared with $306.8 million as of Dec 31, 2019. At the end of the third quarter, total liquidity of the company was $1.6 billion.

Long-term debt including capital lease obligation amounted to $2,987.1 million on Sep 30, 2020 compared with $2,803.4 million as of Dec 31, 2020.

Net cash provided by continuing activities at the end of the first nine months of 2020 was $578 million compared with $1,153.2 million at the end of the first nine months of 2019.

Outlook

The company expects net production to be 146–154 MBOEPD for fourth-quarter 2020. It reaffirmed its 2020 planned capital expenditures in the range of $680-$720 million excluding the Gulf of Mexico NCI and King’s Quay floating production system (FPS) construction spending.


 

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month. The consensus estimate has shifted -100% due to these changes.

VGM Scores

At this time, Murphy Oil has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. 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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