Murphy Oil Earnings: Revenue Shines Brighter Than Expected

Murphy Oil Corporation (NYSE:MUR) delivered a profit and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 0.62%.

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Murphy Oil Corporation Earnings Cheat Sheet

Results: Net income increased to $158.7 million (82 cents per diluted share) in the quarter versus a net loss of $113.93 million in the year-earlier quarter.

Revenue: Rose 8.54% to $7.4 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Murphy Oil Corporation reported adjusted net income of 82 cents per share. By that measure, the company missed the mean analyst estimate of $1.36. It beat the average revenue estimate of $6.81 billion.

Quoting Management:

Steven A. Cossé, President and Chief Executive Officer, commented, “The just completed 2012 was an important year for our Company. Murphy’s Board decided to separate our U.S. downstream subsidiary into an independent public company; the completion of this process is expected during 2013. The U.S. retail business executed a new contract with Walmart, which will provide growth opportunities for this company for the next several years. In the oil and gas business, once again our reserves replacement significantly exceeded our oil and gas production volumes. We continued growth in our Eagle Ford Shale operation, where total production averaged 15,000 net barrels of oil equivalent per day for 2012, with expected 2013 annual production increasing to 30,000 net barrel equivalents per day. We added acreage and working interests in Canada and the Gulf of Mexico, while finalizing sale agreements for our oil and gas properties in the U.K. that are expected to close in the first quarter of this year. We also paid a $2.50 per share special dividend and commenced a stock buyback program near year-end…

…We anticipate total worldwide production volumes of 200,000 barrels of oil equivalent per day in the first quarter of 2013. Sales volumes of oil and natural gas are projected to average 202,000 barrels of oil equivalent per day during the quarter. At the present time, we expect income from continuing operations in the first quarter to range between $0.55 and $0.90 per diluted share. The first quarter estimate includes projected exploration expense of between $70 million and $140 million, and a loss from our downstream businesses of approximately $10 million. Results could vary based on the risk factors described below.”

Key Stats:

Revenue increased 3.9% from $7.12 billion in the previous quarter. Net income decreased 29.99% from $226.68 million 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 $1.38 to a profit $1.3. For the current year, the average estimate has moved down from a profit of $5.65 to a profit of $5.53 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)