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Why Is Murphy Oil (MUR) Up 3.6% Since Its Last Earnings Report?

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A month has gone by since the last earnings report for Murphy Oil Corporation (MUR - Free Report) . Shares have added about 3.6% in that time frame.

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

Murphy Oil Q1 Earnings and Revenues Beat Estimates

Murphy Oil reported first-quarter 2018 earnings of 23 cents per share, surpassing the Zacks Consensus Estimate of 22 cents. Further, the figure was significantly better than the year-ago quarter’s loss of 6 cents.

On a GAAP basis, net income per share was 97 cents, much higher than the 33 cents reported a year ago.

Revenues

In the quarter under review, Murphy Oil’s revenues came in at $585.6 million, surpassing the Zacks Consensus Estimate of $571 million by 2.79%. The top line, however, decreased 11.9% on a year-over-year basis.

Quarterly Highlights

Murphy Oil produced 88,533 barrels of oil per day (bbl/d) in the first quarter compared with 95,605 bbl/d in the prior-year quarter. It sold 87,668 bbl/d during the quarter compared with 89,887 bbl/d a year ago.

Murphy Oil produced 1,67,506 barrels of oil equivalent per day (boe/d) in the first quarter compared with 1,69,225 boe/d in the prior-year quarter, down by nearly 1%. It sold 1,67,152 boe/d during the quarter compared with 1,63,972 boe/d a year ago, up by 1.9%.

Financial Condition

Murphy Oil had cash and cash equivalents of $938.6 million as of Mar 31, 2018, compared with $965 million as of Dec 31, 2017.

Long-term debt was $2,898.9 million as of Mar 31, 2018, compared with $2,906.5 million as of Dec 31, 2017.

Net cash from operating activities in the first quarter was $278.5 million, lower than $305.5 million in the year-ago quarter.

In the reported quarter, the company’s total capital expenditure was $300.4 million compared with $214.5 million in the year-ago quarter.

Guidance

Murphy Oil expects net production for second-quarter 2018 in the range of 166-169 thousand barrels of oil equivalent per day (Mboepd) with full-year 2018 production to be in the range of 167-170 Mboepd. The company estimates total exploration expenses of $41 million in the second quarter.

The company expects 2018 capital expenditure budget to be $1,110 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower. Last month, the consensus estimate has shifted by 8.9% due to these changes.

Murphy Oil Corporation Price and Consensus

 

VGM Scores

At this time, MUR has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile 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 equally suitable for growth and momentum investors than value investors.

Outlook

MUR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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