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Analyzing Marathon Oil’s 2Q16 Earnings

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Aug. 4 2016, Published 3:41 p.m. ET

Marathon Oil beats 2Q16 earnings estimates

Marathon Oil (MRO) announced its 2Q16 earnings on August 3, 2016, after the market closed. Marathon Oil reported adjusted EPS (earnings per share) of -$0.23, $0.02 better than the Wall Street analyst EPS estimate of -$0.25. Marathon Oil’s 2Q16 EPS were almost equal to its 2Q15 EPS. However, when compared sequentially with the 1Q16 EPS, MRO’s 2Q16 EPS are $0.20 higher.

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Marathon Oil’s 2Q16 revenues beat estimates

For 2Q16, MRO reported adjusted revenues of ~$1.3 billion, ~21% better than the Wall Street analyst estimate of ~$1.1 billion in revenues. Marathon’s 2Q16 revenues are ~15% lower than the 2Q15 revenues of ~$1.5 billion. However, when compared sequentially with 1Q16 revenues, Marathon Oil’s 2Q16 revenues are ~78% higher.

Marathon Oil’s earnings trend

As shown in the above chart, Marathon Oil reported much lower EPS in 2015 due to lower realized crude oil (USO) and natural gas (UNG) prices. In 4Q14, Marathon saw its adjusted earnings turn negative for the first time since 1999.

Since 2013, Marathon Oil has beaten the earnings expectations ~57% of the time. Upstream players Southwestern Energy (SWN), ConocoPhillips (COP), and EOG Resources (EOG) have beaten earnings expectations ~57%, ~64%, and ~92% of the time, respectively.

In this series

Now that we’ve analyzed Marathon’s 2Q16 earnings and revenue performance, in the course of this series, we’ll also look at Marathon’s 2Q16 cash flow, operational performance, Wall Street analyst ratings, price forecast using implied volatility, and stock price reaction to past earnings beats. In the next part of this series, we’ll take a look at how much cash Marathon Oil generated in 2Q16.

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