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Analyzing Marathon Oil’s 1Q16 Earnings Performance

Did Marathon Oil’s 1Q16 Earnings Beat Analysts' Estimates?

Marathon Oil’s 1Q16 earnings beat estimates

Marathon Oil (MRO) announced its 1Q16 earnings on May 4, 2016, after the Market closed. MRO reported an adjusted loss of $0.43 per share, $0.02 better than Wall Street analysts’ consensus for a loss of $0.45 per share.

Marathon Oil’s 1Q16 earnings are lower by $0.06 per share when compared with its 1Q15 loss of $0.37 per share. WBut when compared sequentially with 4Q15, Marathon Oil’s 1Q16 earnings are higher by $0.05 per share.

Marathon Oil’s 1Q16 revenues miss estimates

For 1Q16, Marathon Oil reported adjusted revenues of ~$730 million, ~16% lower than Wall Street analysts’ consensus for revenues of ~$871 million. Marathon Oil’s 1Q16 revenues are lower by ~52% when compared with 1Q15 revenues of ~$1.5 billion. Even when compared sequentially with 4Q15, MRO’s 1Q16 revenues were lower by ~51%.

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Due to the steep downward trend in energy prices, many S&P 500 (SPY) upstream companies like ConocoPhillips (COP) and Consol Energy (CNX) have reported ~37% and ~36% year-over-year decline in their 1Q16 adjusted revenues, respectively.

EOG Resources (EOG) is expecting an ~38% year-over-year decrease in its 1Q16 adjusted revenues. The Direxion Daily S&P Oil & Gas Exploration and Production Bear 3x Shares ETF (DRIP) is a leveraged inverse ETF that invests in Oil and Gas Exploration and Production companies.

Marathon Oil’s earnings trend

As seen in the above chart, Marathon Oil reported lower earnings in 2015 due to lower realized crude oil (USO) (UWTI) (DWTI) and natural gas (UNG) (BOIL) prices. In 4Q14, Marathon Oil saw its adjusted earnings turn negative for the first time since 2008. Since 1Q13, Marathon Oil beat the earnings expectations ~54% of the time.

Other upstream companies are also reporting negative earnings. Upstream companies EOG Resources (EOG), ConocoPhillips (COP), and Consol Energy (CNX) are reporting negative earnings in the last one, three and four quarters, respectively.

In this series

Having analyzed Marathon Oil’s 1Q16 earnings performance, in the course of this series, we will also look at MRO’s operational performance, Wall Street analyst ratings, and how Marathon Oil’s stock price reacted to past earnings beats.

Now let’s take a look at MRO’s operational performance for 1Q16.

Continue to Next Part

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