Marathon Oil’s 1Q18 Earnings Beat Estimates on Higher Production



Marathon Oil beats adjusted EPS in 1Q18

Marathon Oil (MRO) announced its 1Q18 earnings on May 2 after the market closed. It beat the adjusted EPS (earnings per share) estimate by $0.04 and reported an adjusted profit of $0.18 per share. The Wall Street analyst consensus was $0.14 per share. On a year-over-year basis, its 1Q18 adjusted EPS is $0.25 higher than -$0.07 in 1Q17. Sequentially, its 1Q18 adjusted EPS is higher than $0.07 in 4Q17.

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Marathon Oil beats revenue estimate in 1Q18

Marathon Oil reported 1Q18 revenues of $1.73 billion, which is much better than the Wall Street analyst consensus of $1.37 billion. On a year-over-year basis, its 1Q18 revenues are 62% higher than 1Q17 revenues of $1.07 billion. Even sequentially, its 1Q18 revenues are 25% higher than 4Q17 revenues of $1.38 billion.

The very strong year-over-year increase of 22% in its 1Q18 production from continuing operations, coupled with higher realized prices for crude oil, natural gas liquids, and natural gas, impacted MRO’s revenues positively. Specifically, its realized price for crude oil in the United States increased 28% to $62.22 per barrel in 1Q18, from $48.46 per barrel in 1Q17.

1Q18 reported earnings

Marathon Oil’s adjusted EPS excludes the one-time benefits and charges totaling $0.24 per share. Most of them are related to the gain on dispositions. Adding back these one-time items, its EPS on a GAAP basis is $0.42 for 1Q18. In 1Q17, its EPS was -$5.84 per share.

The company’s higher EPS in 1Q18 can be attributed to an increase in revenues when compared to total costs and expenses. Its revenues saw an increase of 62% in 1Q18 over 1Q17. In comparison, its total costs and expenses increased only 16%, which acted positively on its bottom line.

In reaction to the 1Q18 earnings, MRO stock traded 0.3% higher in after-hours trading on May 2. To find out more on upstream stocks this earnings season, be sure to check out Market Realist’s Energy and Power page.


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