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Can Marathon (MPC) Q1 Earnings Maintain Positive Surprise?
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Marathon Petroleum Corporation (MPC - Free Report) is set to release first-quarter results on May 3. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.12 per share on revenues of $27.9 billion.
Let’s delve into the factors that might have influenced the independent oil refiner and marketer’s results in the March quarter. But it’s worth taking a look at MPC’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last-reported quarter, the Findlay, OH-based downstream operator handily beat the consensus mark on stronger-than-expected performance from both segments. Precisely, operating income from the Refining & Marketing and the Midstream units totaled $881 million and $1.1 billion, respectively, ahead of their Zacks Consensus Estimate of $335 million and $995 million. MPC had reported adjusted earnings per share of $1.30, well above the Zacks Consensus Estimate of 47 cents. Revenues of $35.6 billion generated by the firm also came in above the Zacks Consensus Estimate by 40.6%.
Marathon Petroleum beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 74.8%, on average. This is depicted in the graph below:
Marathon Petroleum Corporation Price and EPS Surprise
The Zacks Consensus Estimate for the first-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 660% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 22% increase from the year-ago period.
Factors to Consider
MPC is expected to have benefited from the strength in refining margins. In the fourth quarter of 2021, the company’s refining margin more than doubled from the year-ago period to $15.88 per barrel. Moreover, throughput rose from 2,528 thousand barrels per day (mbpd) in the fourth quarter of 2020 to 2,936 mbpd. The positive momentum is most likely to have continued in the first quarter, thanks to a marked improvement in fuel demand on the back of rebounding road and airline travel, which pushed up crude differentials and margins. Consequently, the Zacks Consensus Estimate for Marathon Petroleum’s Refining & Marketing segment operating income is pegged at $537 million, turning around from the prior-year quarter’s loss of $598 million. This is likely to have buoyed the first-quarter results of Marathon Petroleum.
On a somewhat bearish note, a higher expense structure might have dampened some of the positive impact. Marathon Petroleum’s total operating cost in the fourth quarter increased some 90% year over year to $33.8 billion. The upward cost trajectory is likely to have continued in the first quarter due to inflationary pressure and a planned turnaround budget.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Marathon Petroleum is likely to beat estimates in the first 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: Marathon has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.12 per share each.
Zacks Rank: MPC currently carries a Zacks Rank #2, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for MPC, here are some firms from the energy space that you may want to consider on the basis of our model:
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #1. The firm is scheduled to release earnings on May 5.
For 2022, EOG has a projected earnings growth rate of 88.5%. Valued at around $66 billion, EOG has increased around 66% in a year.
Rattler Midstream LP has an Earnings ESP of +1.96% and a Zacks Rank #2. The firm is scheduled to release earnings on May 3.
For 2022, RTLR has a projected earnings growth rate of 34.9%. Valued at around $2 billion, Rattler Midstream has increased around 28.3% in a year.
Murphy USA (MUSA - Free Report) has an Earnings ESP of +18.49% and is Zacks #2 Ranked. The firm is scheduled to release earnings on May 3.
MUSA is valued at around $5.6 billion. The company topped the Zacks Consensus Estimate by an average of 24.6% in the trailing four quarters. Murphy USA has gained around 72.8% in a year.
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Can Marathon (MPC) Q1 Earnings Maintain Positive Surprise?
Marathon Petroleum Corporation (MPC - Free Report) is set to release first-quarter results on May 3. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.12 per share on revenues of $27.9 billion.
Let’s delve into the factors that might have influenced the independent oil refiner and marketer’s results in the March quarter. But it’s worth taking a look at MPC’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last-reported quarter, the Findlay, OH-based downstream operator handily beat the consensus mark on stronger-than-expected performance from both segments. Precisely, operating income from the Refining & Marketing and the Midstream units totaled $881 million and $1.1 billion, respectively, ahead of their Zacks Consensus Estimate of $335 million and $995 million. MPC had reported adjusted earnings per share of $1.30, well above the Zacks Consensus Estimate of 47 cents. Revenues of $35.6 billion generated by the firm also came in above the Zacks Consensus Estimate by 40.6%.
Marathon Petroleum beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 74.8%, on average. This is depicted in the graph below:
Marathon Petroleum Corporation Price and EPS Surprise
Marathon Petroleum Corporation price-eps-surprise | Marathon Petroleum Corporation Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the first-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 660% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 22% increase from the year-ago period.
Factors to Consider
MPC is expected to have benefited from the strength in refining margins. In the fourth quarter of 2021, the company’s refining margin more than doubled from the year-ago period to $15.88 per barrel. Moreover, throughput rose from 2,528 thousand barrels per day (mbpd) in the fourth quarter of 2020 to 2,936 mbpd. The positive momentum is most likely to have continued in the first quarter, thanks to a marked improvement in fuel demand on the back of rebounding road and airline travel, which pushed up crude differentials and margins. Consequently, the Zacks Consensus Estimate for Marathon Petroleum’s Refining & Marketing segment operating income is pegged at $537 million, turning around from the prior-year quarter’s loss of $598 million. This is likely to have buoyed the first-quarter results of Marathon Petroleum.
On a somewhat bearish note, a higher expense structure might have dampened some of the positive impact. Marathon Petroleum’s total operating cost in the fourth quarter increased some 90% year over year to $33.8 billion. The upward cost trajectory is likely to have continued in the first quarter due to inflationary pressure and a planned turnaround budget.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Marathon Petroleum is likely to beat estimates in the first 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: Marathon has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.12 per share each.
Zacks Rank: MPC currently carries a Zacks Rank #2, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for MPC, here are some firms from the energy space that you may want to consider on the basis of our model:
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #1. The firm is scheduled to release earnings on May 5.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2022, EOG has a projected earnings growth rate of 88.5%. Valued at around $66 billion, EOG has increased around 66% in a year.
Rattler Midstream LP has an Earnings ESP of +1.96% and a Zacks Rank #2. The firm is scheduled to release earnings on May 3.
For 2022, RTLR has a projected earnings growth rate of 34.9%. Valued at around $2 billion, Rattler Midstream has increased around 28.3% in a year.
Murphy USA (MUSA - Free Report) has an Earnings ESP of +18.49% and is Zacks #2 Ranked. The firm is scheduled to release earnings on May 3.
MUSA is valued at around $5.6 billion. The company topped the Zacks Consensus Estimate by an average of 24.6% in the trailing four quarters. Murphy USA has gained around 72.8% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.