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Marathon Oil (MRO) to Post Q4 Earnings: What's in Store?
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Marathon Oil Corporation (MRO - Free Report) is scheduled to release fourth-quarter 2020 results on Wednesday Feb 17, after the closing bell.
The Zacks Consensus Estimate for the to-be-reported quarter’s loss is 20 cents per share and for revenues is $843.81 million.
Against this backdrop, let’s delve into the factors that might have impacted the company’s performance in the December quarter.
Factors at Play
Marathon Oil’scost-reduction efforts are consistently encouraging. In March 2020, the company cut its full-year capital investment by at least $500 million to $1.9 billion from the earlier provided capex outlook of $2.4 billion, indicating a 30% decrease from the reported capex figure of 2019. Again in April, management announced plans to curb capital spending estimate to $1.3 billion by trimming an additional $600 million from the past guidance issued in March. It further implies a reduction of $1.1 billion from the original projection. This updated capital budget estimate accounts for only 50% of the company’s total capital investment reported in 2019. All these strategic moves are expected to have driven the company’s fourth-quarter earnings and cash flows higher.
However, in the third quarter, Marathon Oil’s International E&P as well as U.S. E&P units’ results were unpleasant due to decreased average price realizations of crude oil and condensate from both the International and North American E&P segments. This downtrend is likely to have continued in the fourth quarter too. The Zacks Consensus Estimate for fourth-quarter average price realizations of crude oil and condensate from the International E&P segment is pegged at $31.68 per barrel, suggesting a decline of 34.4% from $48.26 reported in the year-ago period. Similarly, the consensus mark for fourth-quarter average price realizations of crude oil and condensate from the North American E&P segment stands at $38.94 per barrel, implying a 29.2% fall from $55 reported a year earlier.
Highlights of Q3 Earnings & Surprise History
Marathon Oil Corporation reported third-quarter 2020 adjusted net loss per share of 28 cents, matching the Zacks Consensus Estimate. This performance can be attributed to weak oil and gas price realizations, and lower output, partially offset by a fall in the year-over-year U.S. production costs. However, a year ago, the company earned 14 cents per share.
Marathon Oil’s revenues of $754 million outpaced the Zacks Consensus Estimate of $752 million but fell from the year-ago top-line of $1.35 billion.
As far as earnings surprises are concerned, this Houston, TX-based Marathon Oil displays a moderate record. Its bottom line surpassed the Zacks Consensus Estimate in one of the trailing four quarters, met the same on one occasion and missed the mark in the remaining two quarters, the average negative surprise being 8.09%. This is depicted in the graph below:
Our proven model does not conclusively predict an earnings beat for Marathon Oil this season. 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: Marathon Oil has an Earnings ESP of -1.94%.
While earnings outperformance looks uncertain for Marathon Oil, here are some firms worth considering from the energy space on the basis of our model, which shows that these have the perfect combination of ingredients to deliver a beat this reporting cycle:
PDC Energy, Inc. has an Earnings ESP of +10.77% and is a #1 Ranked stock, currently. The firm is scheduled to release earnings on Feb 24.
Ovintiv Inc. (OVV - Free Report) has an Earnings ESP of +4.95% and is Zacks #3 Ranked, currently. The company is scheduled to release earnings on Feb 17.
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +8.58% and a Zacks Rank of 2, currently. The company is scheduled to release earnings on Feb 22.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Marathon Oil (MRO) to Post Q4 Earnings: What's in Store?
Marathon Oil Corporation (MRO - Free Report) is scheduled to release fourth-quarter 2020 results on Wednesday Feb 17, after the closing bell.
The Zacks Consensus Estimate for the to-be-reported quarter’s loss is 20 cents per share and for revenues is $843.81 million.
Against this backdrop, let’s delve into the factors that might have impacted the company’s performance in the December quarter.
Factors at Play
Marathon Oil’scost-reduction efforts are consistently encouraging. In March 2020, the company cut its full-year capital investment by at least $500 million to $1.9 billion from the earlier provided capex outlook of $2.4 billion, indicating a 30% decrease from the reported capex figure of 2019. Again in April, management announced plans to curb capital spending estimate to $1.3 billion by trimming an additional $600 million from the past guidance issued in March. It further implies a reduction of $1.1 billion from the original projection. This updated capital budget estimate accounts for only 50% of the company’s total capital investment reported in 2019. All these strategic moves are expected to have driven the company’s fourth-quarter earnings and cash flows higher.
However, in the third quarter, Marathon Oil’s International E&P as well as U.S. E&P units’ results were unpleasant due to decreased average price realizations of crude oil and condensate from both the International and North American E&P segments. This downtrend is likely to have continued in the fourth quarter too. The Zacks Consensus Estimate for fourth-quarter average price realizations of crude oil and condensate from the International E&P segment is pegged at $31.68 per barrel, suggesting a decline of 34.4% from $48.26 reported in the year-ago period. Similarly, the consensus mark for fourth-quarter average price realizations of crude oil and condensate from the North American E&P segment stands at $38.94 per barrel, implying a 29.2% fall from $55 reported a year earlier.
Highlights of Q3 Earnings & Surprise History
Marathon Oil Corporation reported third-quarter 2020 adjusted net loss per share of 28 cents, matching the Zacks Consensus Estimate. This performance can be attributed to weak oil and gas price realizations, and lower output, partially offset by a fall in the year-over-year U.S. production costs. However, a year ago, the company earned 14 cents per share.
Marathon Oil’s revenues of $754 million outpaced the Zacks Consensus Estimate of $752 million but fell from the year-ago top-line of $1.35 billion.
As far as earnings surprises are concerned, this Houston, TX-based Marathon Oil displays a moderate record. Its bottom line surpassed the Zacks Consensus Estimate in one of the trailing four quarters, met the same on one occasion and missed the mark in the remaining two quarters, the average negative surprise being 8.09%. This is depicted in the graph below:
Marathon Oil Corporation Price and EPS Surprise
Marathon Oil Corporation price-eps-surprise | Marathon Oil Corporation Quote
What Does Our Model Say?
Our proven model does not conclusively predict an earnings beat for Marathon Oil this season. 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: Marathon Oil has an Earnings ESP of -1.94%.
Zacks Rank: Marathon Oil carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
While earnings outperformance looks uncertain for Marathon Oil, here are some firms worth considering from the energy space on the basis of our model, which shows that these have the perfect combination of ingredients to deliver a beat this reporting cycle:
PDC Energy, Inc. has an Earnings ESP of +10.77% and is a #1 Ranked stock, currently. The firm is scheduled to release earnings on Feb 24.
Ovintiv Inc. (OVV - Free Report) has an Earnings ESP of +4.95% and is Zacks #3 Ranked, currently. The company is scheduled to release earnings on Feb 17.
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +8.58% and a Zacks Rank of 2, currently. The company is scheduled to release earnings on Feb 22.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
AccessZacks Top 10 Stocks for 2021 today >>