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Can Marathon (MPC) Q3 Earnings Maintain the Beat Streak?
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Marathon Petroleum Corporation (MPC - Free Report) is set to release third-quarter results on Nov 1. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $6.80 per share on revenues of $35.7 billion.
Let’s delve into the factors that might have influenced the independent oil refiner and marketer’s results in the September quarter. But it’s worth taking a look at MPC’s previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last-reported quarter, the Findlay, OH-based downstream operator handily beat the consensus mark on stronger-than-expected performance of its Refining & Marketing segment, whose operating income totaled $7.1 billion, ahead of its Zacks Consensus Estimate by 108.4%. MPC had reported adjusted earnings per share of $10.61, well above the Zacks Consensus Estimate of $9.17. Revenues of $54.2 billion generated by the firm also came in above the Zacks Consensus Estimate by 63.1%.
Marathon Petroleum beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 56.7%, on average. This is depicted in the graph below:
Marathon Petroleum Corporation Price and EPS Surprise
The Zacks Consensus Estimate for the third-quarter bottom line has remained the same in the past seven days. The estimated figure indicates an 831.5% surge year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 9.4% increase from the year-ago period.
Factors to Consider
MPC is expected to have benefited from the strength in refining margins. In the second quarter of 2022, the company’s refining margin of $37.54 per barrel rocketed from $12.45 a year ago. Moreover, throughput rose from 2,854 thousand barrels per day (mbpd) in the second quarter of 2021 to 3,069 mbpd.
Despite softening from the spectacular highs of the June quarter, the overall positive momentum is most likely to have continued in the third quarter, thanks to the strength 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 $3.6 billion, increasing exponentially from the prior-year quarter’s profit of just $509 million. This is likely to have buoyed the second-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 second quarter increased some 59.1% year over year to $45.9 billion. The upward cost trajectory is likely to have continued in the July-September period 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 third 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 Petroleum has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $6.80 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 Marathon Petroleum, here are some firms from the energy space that you may want to consider on the basis of our model:
The Williams Companies (WMB - Free Report) has an Earnings ESP of +1.53% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct 31.
For 2022, Williams has a projected earnings growth rate of 13.2%. Valued at around $39.2 billion, WMB has gained 14.4% in a year.
Chesapeake Energy Corporation has an Earnings ESP of +0.42% and a Zacks Rank #2. The firm is scheduled to release earnings on Nov 1.
Chesapeake Energy topped the Zacks Consensus Estimate by an average of 24.5% in the trailing four quarters, including a 30.2% beat in Q2. Valued at around $11.9 billion, CHK has gained 47.9% in a year.
Sunoco LP (SUN - Free Report) has an Earnings ESP of +3.51% and a Zacks Rank #2. The firm is scheduled to release earnings on Nov 1.
For 2022, Sunoco has a projected earnings growth rate of 14.8%. Valued at around $4.2 billion, SUN has edged up 3.9% in a year.
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Can Marathon (MPC) Q3 Earnings Maintain the Beat Streak?
Marathon Petroleum Corporation (MPC - Free Report) is set to release third-quarter results on Nov 1. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $6.80 per share on revenues of $35.7 billion.
Let’s delve into the factors that might have influenced the independent oil refiner and marketer’s results in the September quarter. But it’s worth taking a look at MPC’s previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last-reported quarter, the Findlay, OH-based downstream operator handily beat the consensus mark on stronger-than-expected performance of its Refining & Marketing segment, whose operating income totaled $7.1 billion, ahead of its Zacks Consensus Estimate by 108.4%. MPC had reported adjusted earnings per share of $10.61, well above the Zacks Consensus Estimate of $9.17. Revenues of $54.2 billion generated by the firm also came in above the Zacks Consensus Estimate by 63.1%.
Marathon Petroleum beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 56.7%, 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 third-quarter bottom line has remained the same in the past seven days. The estimated figure indicates an 831.5% surge year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 9.4% increase from the year-ago period.
Factors to Consider
MPC is expected to have benefited from the strength in refining margins. In the second quarter of 2022, the company’s refining margin of $37.54 per barrel rocketed from $12.45 a year ago. Moreover, throughput rose from 2,854 thousand barrels per day (mbpd) in the second quarter of 2021 to 3,069 mbpd.
Despite softening from the spectacular highs of the June quarter, the overall positive momentum is most likely to have continued in the third quarter, thanks to the strength 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 $3.6 billion, increasing exponentially from the prior-year quarter’s profit of just $509 million. This is likely to have buoyed the second-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 second quarter increased some 59.1% year over year to $45.9 billion. The upward cost trajectory is likely to have continued in the July-September period 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 third 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 Petroleum has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $6.80 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 Marathon Petroleum, here are some firms from the energy space that you may want to consider on the basis of our model:
The Williams Companies (WMB - Free Report) has an Earnings ESP of +1.53% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct 31.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2022, Williams has a projected earnings growth rate of 13.2%. Valued at around $39.2 billion, WMB has gained 14.4% in a year.
Chesapeake Energy Corporation has an Earnings ESP of +0.42% and a Zacks Rank #2. The firm is scheduled to release earnings on Nov 1.
Chesapeake Energy topped the Zacks Consensus Estimate by an average of 24.5% in the trailing four quarters, including a 30.2% beat in Q2. Valued at around $11.9 billion, CHK has gained 47.9% in a year.
Sunoco LP (SUN - Free Report) has an Earnings ESP of +3.51% and a Zacks Rank #2. The firm is scheduled to release earnings on Nov 1.
For 2022, Sunoco has a projected earnings growth rate of 14.8%. Valued at around $4.2 billion, SUN has edged up 3.9% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.