Marathon Oil Cuts Losses By More than 74% in 4Q16



Net incomes

Marathon Oil (MRO) announced its 4Q16 earnings after the market closed on February 15, 2017. Marathon Oil reported better-than-expected earnings of ~-$83 million. Wall Street analysts were expecting earnings of ~-$115 million.

On a year-over-year basis, MRO cut its losses by more than 74% in 4Q16, compared to ~-$323 million in 4Q15. On a sequential basis, excluding one-time items, MRO reduced its losses by ~14% from ~-$97 million in 3Q16.

For 2016, MRO reported lower adjusted net income of ~-$693 million, or -$0.85 per share, compared to ~-$869 million, or -$1.28 per share, in 2015.

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In 4Q16, MRO reported adjusted revenue of ~$1.4 billion, ~17% better than Wall Street analysts’ consensus estimate of ~$1.2 billion. MRO’s revenue beat can be attributed to its better-than-expected production (USO) (UNG) in 4Q16. We’ll study MRO’s production in the next article. MRO’s 4Q16 revenue was ~6% lower than its 4Q15 revenue of ~$1.5 billion. However, when compared sequentially with 3Q16, MRO’s 4Q16 revenue was ~13% higher.

For 2016, Marathon Oil reported revenue of ~$4.7 billion, ~21% lower than ~$5.9 billion in 2015. MRO’s peer Devon Energy (DVN), which also has operations in Oklahoma STACK, reported revenue of ~$10.3 billion, ~22% lower than ~$13.2 billion in 2015.

In this series…

Having analyzed Marathon Oil’s 4Q16 earnings and revenue performance, throughout this series, we’ll also look at the company’s production performance, operational performance, capital budget plans, dividend, cash flows, analyst ratings, and price forecast by way of implied volatility.


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