Marathon Oil Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Marathon Oil (NYSE:MRO) will unveil its latest earnings on Tuesday, November 6, 2012. Marathon Oil is an oil and natural gas exploration and production company with operations in North America, Africa, and Europe.

Marathon Oil Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 65 cents per share, a rise of 10.2% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate moved down. It has risen from 64 cents during the last month. Analysts are projecting profit to rise by 16.5% compared to last year’s $2.68.

Past Earnings Performance: Last quarter, the company showed net income of 59 cents per share in the second quarter to fall in line with expectations, the company beat estimates by 20 cents in the first quarter. This comes after the company failed to meet analysts’ expectations in the previous two.

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A Look Back: In the second quarter, profit fell 60.5% to $393 million (56 cents a share) from $996 million ($1.39 a share) the year earlier, meeting analyst expectations. Revenue rose 2.3% to $3.78 billion from $3.7 billion.

Stock Price Performance: Between September 5, 2012 and October 31, 2012, the stock price had risen $2.88 (10.6%), from $27.18 to $30.06. The stock price saw one of its best stretches over the last year between July 12, 2012 and July 19, 2012, when shares rose for six straight days, increasing 10.2% (+$2.48) over that span. It saw one of its worst periods between May 10, 2012 and May 18, 2012 when shares fell for seven straight days, dropping 10.6% (-$2.85) over that span.

Wall St. Revenue Expectations: On average, analysts predict $3.5 billion in revenue this quarter, a decline of 7.9% from the year-ago quarter. Analysts are forecasting total revenue of $15.52 billion for the year, a rise of 1.6% from last year’s revenue of $15.28 billion.

Key Stats:

On the top line, the company is looking to build on last quarter’s revenue increase, which snapped a string of revenue drops. Revenue fell 80.1% in the third quarter of the last fiscal year, 81.3% in the fourth quarter of the last fiscal year and 80.7% in the first quarter before climbing in the second quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 45.7% over the past four quarters.

Analyst Ratings: With nine analysts rating the stock a buy, none rating it a sell and seven rating the stock a hold, there are indications of a bullish stance by analysts. Over the last three months, the stock’s average rating has increased from hold to moderate buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.69 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company regressed in this liquidity measure from 0.74 in the first quarter to the last quarter driven in part by a decrease in current assets. Current assets decreased 5.5% to $3.25 billion while liabilities rose by 0.4% to $4.69 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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