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What to Expect from Murphy Oil’s 1Q16 Earnings

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Murphy Oil’s 1Q16 earnings and revenues estimates

Murphy Oil (MUR) is set to report its 1Q16 earnings on May 4, 2016, after the market closes. For 1Q16, Wall Street analysts expect Murphy Oil to report an adjusted loss of $0.68 per share, which is higher by $0.43 per share when compared with its 1Q15 loss of $1.11 per share. Even when compared sequentially with 4Q15, Murphy Oil’s 1Q16 earnings expectations are higher by $0.08 per share.

For 1Q16, Wall Street analysts expect Murphy Oil to report revenues of ~$439 million, which is lower by ~52% when compared with 1Q15 revenues of ~$922 million. Even when compared sequentially with 4Q15, MUR’s 1Q16 revenues expectations are lower by ~33%. The lower revenue expectations for 1Q16 are the direct result of lower production guidance as well as a steep decline in crude oil (USO) (UWTI) (DWTI) and natural gas (UNG) (UGAZ) (DGAZ) prices.

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Murphy Oil’s earnings trend

As seen in the above chart, Murphy Oil reported much lower earnings in 2015 due to lower realized crude oil (OIL) and natural gas (BOIL) prices. In 1Q15, Murphy Oil saw its adjusted earnings turn negative for the first time since 1Q13.

In 4Q15, excluding the one-time items, MUR reported a loss of $0.76 per share, $0.55 better than the consensus for a loss of $1.31 per share. Its revenues fell by ~53% year-over-year to ~$658 million. Since 1Q13, MUR beat the earnings expectations ~75% of the time.

Due to the steep downward trend in energy prices, upstream companies Memorial Resource Development (MRD), WPX Energy (WPX), ConocoPhillips (COP), and SM Energy (SM) have reported ~7%, ~19%, ~40%, and ~49% year-over-year declines in their 4Q15 adjusted revenues, respectively.

In this series

Having analyzed Murphy Oil’s 1Q16 earnings expectations, in this series, we will also look at MUR’s production guidance, what Wall Street analysts are saying about Murphy Oil ahead of its earnings, and how MUR’s stock price reacted to past earnings.

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