It has been about a month since the last earnings report for Murphy Oil (MUR - Free Report) . Shares have lost about 1.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Murphy Oil due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. <p style="text-align: justify;"><strong>Murphy Oil Beats Q2 Earnings and Revenue Estimates</strong><br /><br />Murphy Oil delivered second-quarter 2018 earnings of 36 cents per share, surpassing the Zacks Consensus Estimate of 35 cents by 2.9%. Further, the figure was significantly better than the year-ago quarter’s loss of 11 cents.<br /><br />On a GAAP basis, net income per share was 26 cents compared with a loss of 10 cents in the prior-year quarter.<br /><br /><strong>Revenues</strong><br /><br />In the quarter under review, Murphy Oil’s revenues totaled $618.2 million, surpassing the Zacks Consensus Estimate of $598 million by 3.4%. The top line increased 21.6% on a year-over-year basis.<br /><br />Murphy Oil Corporation Price, Consensus and EPS Surprise<br /><br />Murphy Oil Corporation Price, Consensus and EPS Surprise | Murphy Oil Corporation Quote<br /><br /><strong>Operational Highlights</strong><br /><br />The company produced 170,993 barrels of oil equivalent per day (boe/d) in the second quarter up 5% than year ago figure of 162,857 boe/d. The production exceeded guidance range of 166,000 to 169,000 boe/d, courtesy of improved performance in the high-margin Front Runner, Clipper, Thunder Hawk and Kodiak Fields in the Gulf of Mexico.<br /><br />Murphy Oil sold 170,681 boe/d, up 6.5% from 160,203 boe/d in the year-ago quarter.<br /><br />Murphy Oil’s total costs and expenses were $476.1 million, up 6.5% from $446.7 million in the year-ago quarter.<br /><br />Operating income from continuing operations came in at $142.1 million, higher than $61.6 million in the prior-year quarter. <br /><br />The company incurred interest charges of $44.7 million, down 1% from $45.1 million in the prior-year quarter.<br /><br /><strong>Financial Condition</strong><br /><br />Murphy Oil had cash and cash equivalents of $901.3 million as of Jun 30, 2018 compared with $965 million as of Dec 31, 2017.<br /><br />Long-term debt was $2,897.3 million as of Jun 30, 2018 compared with $2,906.5 million as of Dec 31, 2017.<br /><br />Net cash provided by continuing operations activities at the end of first half of 2018 was $624.5 million, higher than $591.5 million at the end of the first half of 2017.<br /><br />In the reported quarter, the company’s total capital expenditure was $300.7 million compared with $200.5 million in the year-ago quarter.<br /><br /><strong>Guidance</strong><br /><br />Murphy Oil expects net production for third-quarter 2018 in the range of 166,500 to 168,500 boe/d. For 2018, production is estimated in the range of 168,500 to 170,500 boe/d.The company expects 2018 capital expenditure budget to be $1.18 billion.<br /> </p>
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -24.9% due to these changes.
Currently, Murphy Oil has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Murphy Oil has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.