Marathon Oil Corp Earnings Cheat Sheet: Profit Declines

S&P 500 (NYSE:SPY) component Marathon Oil Corporation (NYSE:MRO) saw profit fall in the third quarter. Marathon Oil is an oil and natural gas exploration and production company with operations in North America, Africa, and Europe.

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Marathon Oil Earnings Cheat Sheet for the Third Quarter

Results: Net income for Marathon Oil Corporation fell to $405 million (57 cents per share) vs. $696 million (98 cents per share) a year earlier. This is a decline of 41.8% from the year earlier quarter.

Revenue: Rose to $3.8 billion from $2.95 billion in the year earlier quarter.

Actual vs. Wall St. Expectations: MRO reported adjusted net income of 59 cents per share. By that measure, the company fell short of mean estimate of 85 cents per share. It beat the average revenue estimate of $2.6 billion.

Quoting Management: “Operationally, we had a strong quarter across our assets,” said Clarence P. Cazalot Jr, Marathon Oil`s chairman, president and CEO. “Our production available for sale from the combined Exploration and Production (E&P) and Oil Sands Mining (NYSE:OSM) segments was up two percent over the second quarter, driven by strong reliability, particularly in Norway and Equatorial Guinea, and a full quarter of the Athabasca Oil Sands Project (AOSP) post-Expansion one. Operating cash flow remains solid even with the pullback in commodity prices, essentially self-funding our capital program and robust dividend and providing the opportunity to repurchase approximately 12 million shares for $300 million during the quarter. The higher tax rate in the third quarter of 2011 is largely a result of excess foreign tax credits the Company currently does not expect to utilize in the future, which resulted in a non-cash charge of $227 million in the quarter.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the second quarter, net income rose 40.5% from the year earlier, while the figure increased more than twofold in the first quarter, 98.9% in the fourth quarter of the last fiscal year and 68.5% in the third quarter of the last fiscal year.

The company has now fallen short of estimates in the last two quarters. In the second quarter, it missed expectations by 3 cents with net income of 96 cents versus a mean estimate of net income of 99 cents per share.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 96 cents per share to 86 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At $4.03 per share, the average estimate for the fiscal year has fallen from $4.16 ninety days ago.

Competitors to Watch: Chevron Corporation (NYSE:CVX), ConocoPhillips (NYSE:COP), Hess Corp. (NYSE:HES), Exxon Mobil Corporation (NYSE:XOM), BP plc (NYSE:BP), TOTAL S.A. (NYSE:TOT), Statoil ASA (NYSE:STO), Repsol YPF, S.A. (REPYY), and Murphy Oil Corporation (NYSE:MUR).

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(Source: Xignite Financials)