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This Is Why Marathon (MRO) is Set for Strong Q4 Earnings
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Marathon Oil Corporation (MRO - Free Report) is set to release fourth-quarter results after the closing bell on Feb 16. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 55 cents per share on revenues of $1.6 billion.
Let’s delve into the factors that might have influenced the independent oil and gas producer’s performance in the December quarter. But it’s worth taking a look at MRO’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last-reported quarter, the Houston, TX-based upstream player beat the consensus mark on stronger liquids price realizations and higher year-over-year production contribution from the Bakken and Eagle Ford regions. Marathon Oil had reported adjusted net income per share of 39 cents, ahead of the Zacks Consensus Estimate by 8 cents. Revenues of $1.5 billion generated by the firm had also come in above the Zacks Consensus Estimate of $1.3 billion.
MRO beat the Zacks Consensus Estimate in each of the last four quarters, which resulted in an earnings surprise of 37.4%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the fourth-quarter bottom line remained the same in the last seven days. The estimated figure indicates a 558.3% surge year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests an 89.3% increase from the year-ago period.
Factors to Consider
Marathon is expected to have benefited from the surge in oil and natural gas realizations. As a reflection of this price boost, the Zacks Consensus Estimate for the fourth-quarter average sales price for liquids (crude oil, condensate) and natural gas are pegged at $76 per barrel and $5.42 per thousand cubic feet, respectively, up significantly from a year earlier when the company had fetched $39.71 and $2.31. The year-over-year improvement in realizations has most likely buoyed Marathon’s revenues and cash flows. As a matter of fact, for the to-be-reported quarter, the consensus mark for the U.S. E&P unit is pegged at a profit of $542 million, indicating a turnaround from the prior-year quarter’s loss of $33 million.
Marathon is also expected to have benefited from a leaner cost structure during the quarter. The company continues to cut down costs substantially and is striving to achieve a 30% decrease in production and G&A costs in 2021 compared to the 2019 levels. MRO has already implemented a broad-based reduction to CEO and board compensation, rightsized the workforce and even gave up its corporate aircraft.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for Marathon this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Marathon has an Earnings ESP of +4.66% and a Zacks Rank #1.
Marathon Oil is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:
Viper Energy Partners LP (VNOM - Free Report) has an Earnings ESP of +14.93% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
ProPetro Holding Corp. (PUMP - Free Report) has an Earnings ESP of +100% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Feb 22.
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This Is Why Marathon (MRO) is Set for Strong Q4 Earnings
Marathon Oil Corporation (MRO - Free Report) is set to release fourth-quarter results after the closing bell on Feb 16. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 55 cents per share on revenues of $1.6 billion.
Let’s delve into the factors that might have influenced the independent oil and gas producer’s performance in the December quarter. But it’s worth taking a look at MRO’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last-reported quarter, the Houston, TX-based upstream player beat the consensus mark on stronger liquids price realizations and higher year-over-year production contribution from the Bakken and Eagle Ford regions. Marathon Oil had reported adjusted net income per share of 39 cents, ahead of the Zacks Consensus Estimate by 8 cents. Revenues of $1.5 billion generated by the firm had also come in above the Zacks Consensus Estimate of $1.3 billion.
MRO beat the Zacks Consensus Estimate in each of the last four quarters, which resulted in an earnings surprise of 37.4%, on average. This is depicted in the graph below:
Marathon Oil Corporation Price and EPS Surprise
Marathon Oil Corporation price-eps-surprise | Marathon Oil Corporation Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line remained the same in the last seven days. The estimated figure indicates a 558.3% surge year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests an 89.3% increase from the year-ago period.
Factors to Consider
Marathon is expected to have benefited from the surge in oil and natural gas realizations. As a reflection of this price boost, the Zacks Consensus Estimate for the fourth-quarter average sales price for liquids (crude oil, condensate) and natural gas are pegged at $76 per barrel and $5.42 per thousand cubic feet, respectively, up significantly from a year earlier when the company had fetched $39.71 and $2.31. The year-over-year improvement in realizations has most likely buoyed Marathon’s revenues and cash flows. As a matter of fact, for the to-be-reported quarter, the consensus mark for the U.S. E&P unit is pegged at a profit of $542 million, indicating a turnaround from the prior-year quarter’s loss of $33 million.
Marathon is also expected to have benefited from a leaner cost structure during the quarter. The company continues to cut down costs substantially and is striving to achieve a 30% decrease in production and G&A costs in 2021 compared to the 2019 levels. MRO has already implemented a broad-based reduction to CEO and board compensation, rightsized the workforce and even gave up its corporate aircraft.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for Marathon this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Marathon has an Earnings ESP of +4.66% and a Zacks Rank #1.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Marathon Oil is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:
Viper Energy Partners LP (VNOM - Free Report) has an Earnings ESP of +14.93% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
ProPetro Holding Corp. (PUMP - Free Report) has an Earnings ESP of +100% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Feb 22.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.