Advertisement
Singapore markets closed

  • Straits Times Index

    3,176.51
    -11.15 (-0.35%)
     

  • Nikkei

    37,068.35
    -1,011.35 (-2.66%)
     

  • Hang Seng

    16,224.14
    -161.73 (-0.99%)
     

  • FTSE 100

    7,839.86
    -37.19 (-0.47%)
     

  • Bitcoin USD

    64,848.20
    +3,286.11 (+5.34%)
     

  • CMC Crypto 200

    1,335.28
    +22.66 (+1.76%)
     

  • S&P 500

    5,011.12
    -11.09 (-0.22%)
     

  • Dow

    37,775.38
    +22.07 (+0.06%)
     

  • Nasdaq

    15,601.50
    -81.87 (-0.52%)
     

  • Gold

    2,396.20
    -1.80 (-0.08%)
     

  • Crude Oil

    82.26
    -0.47 (-0.57%)
     

  • 10-Yr Bond

    4.6470
    0.0000 (0.00%)
     

  • FTSE Bursa Malaysia

    1,547.57
    +2.81 (+0.18%)
     

  • Jakarta Composite Index

    7,087.32
    -79.50 (-1.11%)
     

  • PSE Index

    6,443.00
    -80.19 (-1.23%)
     

Analyzing Murphy Oil’s 1Q16 Earnings Performance

Nicholas Chapman

Why Did Murphy Oil Shares Fall despite Its 1Q16 Earnings Beat?

Murphy Oil’s 1Q16 earnings beat estimates

Murphy Oil (MUR) announced its 1Q16 earnings on May 4, 2016, after the Market closed. It reported an adjusted EPS (earnings per share) of -$0.66 per share. This was $0.05 better than Wall Street analysts’ consensus for an EPS of -$0.71 per share. Murphy Oil’s 1Q16 earnings are higher by $0.45 per share—compared to -$1.11 per share in 1Q15. Even when compared sequentially with 4Q15, Murphy Oil’s 1Q16 earnings are higher by $0.10 per share.

Murphy Oil’s 1Q16 revenue missed estimates

For 1Q16, Murphy Oil reported adjusted revenue of ~$430 million. This was ~2% lower than Wall Street analysts’ consensus of ~$439 million. Murphy Oil’s 1Q16 revenues are lower by ~53%—compared to its 1Q15 revenues of ~$922 million. Even when compared sequentially with 4Q15, Murphy Oil’s 1Q16 revenues are lower by ~35%.

ADVERTISEMENT

Due to the steep downward trend in energy prices, many S&P 500 (SPY) upstream companies like Range Resources (RRC), Devon Energy (DVN), and ConocoPhillips (COP) reported an ~24%, ~35%, and ~37% year-over-year decline in their 1Q16 adjusted revenues, respectively. The Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3x Shares (DRIP) is a leveraged inverse ETF. It invests in oil and gas exploration and production companies.

Murphy Oil’s earnings trend

As you can see in the above chart, Murphy Oil reported much lower earnings in 2015 due to lower realized crude oil (USO) (UWTI) (DWTI) and natural gas (UNG) (BOIL) prices. In 1Q15, Murphy Oil saw its adjusted earnings turn negative for the first time since 1Q13. Since 1Q13, Murphy Oil beat the earnings expectations ~69% of the time.

Due to lower realized crude oil (UCO) (SCO) and natural gas (GASX) (GASL) prices, other upstream companies like Range Resources (RRC) and Devon Energy (DVN) also saw their earnings turn negative in 1Q16. ConocoPhillips (COP) has reported negative earnings since 2Q15.

What’s in this series?

Having analyzed Murphy Oil’s 1Q16 earnings performance, in this series we’ll look at its operational performance, Wall Street analysts’ ratings, and how its stock price reacted to past earnings beats.

Now, let’s take a look at Murphy Oil’s operational performance for 1Q16.

Continue to Next Part

Browse this series on Market Realist: