Marathon Oil Earnings: Here’s Why Investors Don’t Like These Results

Marathon Oil Corporation (NYSE:MRO) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.91%.

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Marathon Oil Corporation Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 23.88% to $0.51 in the quarter versus EPS of $0.67 in the year-earlier quarter.

Revenue: Rose 1.63% to $4.11 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Marathon Oil Corporation reported adjusted EPS income of $0.51 per share. By that measure, the company missed the mean analyst estimate of $0.72. It missed the average revenue estimate of $4.25 billion.

Quoting Management: “Marathon Oil’s first quarter performance was highlighted by continued growth in production available for sale, up 4 percent over the prior quarter and 19 percent over the first quarter of 2012, excluding Libya and Alaska, largely driven by our U.S. resource plays,” said Clarence P. Cazalot, Jr., Marathon Oil’s chairman, president and CEO. “Net sales volumes, excluding Libya, grew 3 percent over the previous quarter to 485,000 barrels of oil equivalent per day (boed). These higher sales volumes, along with improved cash production costs per barrel of oil equivalent and higher crude oil and condensate realizations in North America, led to a 40 percent increase in cash flow from operations before changes in working capital for the quarter.”

Key Stats (on next page)…

Revenue decreased 3.07% from $4.24 billion in the previous quarter. EPS decreased 7.27% from $0.55 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.75 to a profit $0.70. For the current year, the average estimate has moved down from a profit of $3.15 to a profit of $2.93 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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