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Murphy Oil (MUR) Down 17.9% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Murphy Oil Corporation (MUR - Free Report) . Shares have lost about 17.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to its next earnings release, or is MUR due for a breakout? 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 drivers.
Murphy Oil Q4 Earnings Beat, Provides '18 Outlook
Murphy Oil Corporation delivered fourth-quarter 2017 earnings of 8 cents per share, surpassing the Zacks Consensus Estimate of 2 cents. Further, the figure was significantly better than the year-ago quarter’s loss of 16 cents.
On a GAAP basis, net loss per share was $1.66, much wider than the loss of 37 cents a year ago.
Revenues
In the quarter under review, Murphy Oil’s revenues came in at $541.6 million, missing the Zacks Consensus Estimate of $573 million by 5.5%. Moreover, revenues increased 7.1% on a year-over-year basis.
Quarterly Highlights
Murphy Oil produced 168,339 barrels of oil equivalent per day (BOE/d) in the fourth quarter, compared with 167,719 BOE/d in the prior year. It sold 164,201 BOE/d during the fourth quarter compared with 168,679 BOE/d in the prior-year quarter.
The company continued to emphasize cost control during 2017, achieving a full year lease operating expense (excluding synthetic oil operations) of $7.89 per BOE flat with 2016. In addition, full year 2017 selling and general expenses were $223 million, a 16% reduction from the level in 2016.
With continued emphasis on cost control during 2017, the company achieved competitive EBITDAX per barrel of oil equivalent over $22 in the fourth quarter. Further, it generated free cash flow from offshore assets near $120 million in the fourth quarter and over $500 million for 2017.
Murphy Oil increased onshore production by 16% quarter over quarter, excluding asset sales, driven by increased Kaybob Duvernay production of 31%, quarter over quarter.
Financial Condition
Murphy Oil had cash and cash equivalents of $965 million as of Dec 31, 2017, compared with $872.8 million as of Dec 31, 2016.
Long-term debt was $2,906.5 million as of Dec 31, 2017, compared with $2,422.8 million as of Dec 31, 2016.
Net cash from operating activities in the fourth quarter was $310.1 million, lower than $320.4 million in the year-ago quarter.
In the reported quarter, the company’s total capital expenditure was $274 million compared with $176.1 million in the year-ago quarter.
Guidance
Murphy Oil expects net production for first-quarter 2018 in the range of 164-168 thousand barrels of oil equivalent per day (Mboepd) with full-year 2018 production to be in the range of 166-170 Mboepd. The company estimates total exploration expenses of $30 million in first-quarter 2018.
The company expects full year 2018 capital expenditure budget of $1,056 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimate. There has been one revision higher for the current quarter compared to two lower. In the past month, the consensus estimate has shifted lower by 29.5% due to these changes.
At this time, MUR has a nice Growth Score of B, however its Momentum is doing a bit better with an A. However, the stock was also allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall,the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for momentum investors while also being suitable for those looking for growth and to a lesser degree value.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. It's no surprise MUR has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Murphy Oil (MUR) Down 17.9% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Murphy Oil Corporation (MUR - Free Report) . Shares have lost about 17.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to its next earnings release, or is MUR due for a breakout? 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 drivers.
Murphy Oil Q4 Earnings Beat, Provides '18 Outlook
Murphy Oil Corporation delivered fourth-quarter 2017 earnings of 8 cents per share, surpassing the Zacks Consensus Estimate of 2 cents. Further, the figure was significantly better than the year-ago quarter’s loss of 16 cents.
On a GAAP basis, net loss per share was $1.66, much wider than the loss of 37 cents a year ago.
Revenues
In the quarter under review, Murphy Oil’s revenues came in at $541.6 million, missing the Zacks Consensus Estimate of $573 million by 5.5%. Moreover, revenues increased 7.1% on a year-over-year basis.
Quarterly Highlights
Murphy Oil produced 168,339 barrels of oil equivalent per day (BOE/d) in the fourth quarter, compared with 167,719 BOE/d in the prior year. It sold 164,201 BOE/d during the fourth quarter compared with 168,679 BOE/d in the prior-year quarter.
The company continued to emphasize cost control during 2017, achieving a full year lease operating expense (excluding synthetic oil operations) of $7.89 per BOE flat with 2016. In addition, full year 2017 selling and general expenses were $223 million, a 16% reduction from the level in 2016.
With continued emphasis on cost control during 2017, the company achieved competitive EBITDAX per barrel of oil equivalent over $22 in the fourth quarter. Further, it generated free cash flow from offshore assets near $120 million in the fourth quarter and over $500 million for 2017.
Murphy Oil increased onshore production by 16% quarter over quarter, excluding asset sales, driven by increased Kaybob Duvernay production of 31%, quarter over quarter.
Financial Condition
Murphy Oil had cash and cash equivalents of $965 million as of Dec 31, 2017, compared with $872.8 million as of Dec 31, 2016.
Long-term debt was $2,906.5 million as of Dec 31, 2017, compared with $2,422.8 million as of Dec 31, 2016.
Net cash from operating activities in the fourth quarter was $310.1 million, lower than $320.4 million in the year-ago quarter.
In the reported quarter, the company’s total capital expenditure was $274 million compared with $176.1 million in the year-ago quarter.
Guidance
Murphy Oil expects net production for first-quarter 2018 in the range of 164-168 thousand barrels of oil equivalent per day (Mboepd) with full-year 2018 production to be in the range of 166-170 Mboepd. The company estimates total exploration expenses of $30 million in first-quarter 2018.
The company expects full year 2018 capital expenditure budget of $1,056 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimate. There has been one revision higher for the current quarter compared to two lower. In the past month, the consensus estimate has shifted lower by 29.5% due to these changes.
Murphy Oil Corporation Price and Consensus
Murphy Oil Corporation Price and Consensus | Murphy Oil Corporation Quote
VGM Scores
At this time, MUR has a nice Growth Score of B, however its Momentum is doing a bit better with an A. However, the stock was also allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall,the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for momentum investors while also being suitable for those looking for growth and to a lesser degree value.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. It's no surprise MUR has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.