Analyzing Marathon Oil’s 3Q16 Earnings



Marathon Oil beat 3Q16 EPS estimates

Marathon Oil (MRO) announced its 3Q16 earnings on November 2, 2016, after the market closed. It reported an adjusted loss of $0.11 per share, which was $0.09 better than Wall Street analysts’ consensus for a loss of $0.20 per share.

The company’s 3Q16 EPS (earnings per share) rose $0.09 per share compared to a fall of $0.20 per share in 3Q15. Even when compared sequentially with 2Q16, MRO’s 3Q16 EPS rose $0.12 per share.

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Marathon Oil’s 3Q16 revenues were also a beat

For 3Q16, MRO reported adjusted revenue of ~$1.2 billion, which was ~12.0% better than Wall Street analysts’ consensus of ~$1.1 billion. The company’s 3Q16 revenues fell ~7.0% compared to 3Q15 revenues of ~$1.3 billion. Even when compared sequentially with 2Q16, its 3Q16 revenues fell ~6.0%.

Marathon Oil’s earnings trend

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

Since 2013, Marathon Oil has beaten earnings expectations ~60.0% of the time. Other upstream players such as Devon Energy (DVN), ConocoPhillips (COP), and Range Resources (RRC) have beaten earnings expectations ~80.0%, ~67.0%, and ~67.0% of the time, respectively.

In this series

Now that we’ve analyzed Marathon Oil’s 3Q16 earnings and revenue performance, let’s take a look at its 3Q16 cash flow, operational performance, and analyst ratings. We’ll also look at its price forecast using implied volatility and how the stock reacted after beating past earnings estimates.

Let’s start by seeing how much cash Marathon Oil generated in 3Q16.


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