Murphy Oil: Earnings Scorecard – Analyst Blog

Filed in Debt, earnings, Gold Investing, ubs by on May 18, 2010 0 Comments

Subsequent to Murphy Oil Corporation’s ( MUR ) earnings release dated May 5, 2010, the company’s share price has remained largely stable. Despite the earnings sinking below estimates in the quarter, the company’s position remains strong on back of expectations of improved results from its Exploration & Production (E&P) segment. Earnings Review Murphy Oil posted earnings from continuing operations of 77 cents per share in the first quarter of 2010, below the Zacks Consensus Estimate of $1.00. However, earnings were significantly higher than 37 cents reported last year, primarily driven by improved earnings in the E&P segment as a result of higher realized oil prices in the quarter. Earnings from Murphy’s E&P business improved a whopping 391% from a year-ago quarter, primarily due to a 50% higher average realized crude oil sales price. The Refining and Marketing segment posted an earnings loss of $29.7 million in the quarter versus a net income of $10.8 million posted in the year-ago quarter, mainly due to lower refining margins and planned shutdowns for major turnarounds at the company’s two largest refineries at Meraux in Louisiana and Milford Haven in Wales, UK. Revenues in the quarter improved 50% year over year to $5.2 billion, on account of improved oil and gas prices. We have discussed the quarterly results at length here: Murphy Sinks Below Ests Agreement of Analysts Estimate revisions for Murphy Oil have been mixed over the last 7-day and 30-day periods, depicting no specific earnings trend. Over the past week, 1 of 11 analysts lowered the estimates for the upcoming quarter, while none raised their estimates. Estimate revisions for fiscal 2010 drifted on the positive side, with 1 of 14 analysts raising estimates over the past week. None of the analysts lowered their estimates for 2010. For 2011, 3 of 16 analysts positively revised estimates in the last week, while 2 analysts made negative revisions. Over the last month, 3 (out of 11) analysts revised estimates upwards for the next quarter, while 5 cut down estimates. For 2010, estimate revisions were equal in both directions with 5 analysts (out of 14) raising their estimates and 5 lowering theirs. For 2011, we saw 7 (out of 16) upward revisions and 4 downward revisions in the past 30 days. Magnitude of Estimate Revisions Concurrent with the number of revisions for the second quarter 2010 and fiscal 2010 estimates, the current Zacks Consensus Estimate dropped 4 cents and climbed 15 cents, respectively, over the past week. Despite the greater number of positive revisions for 2011 estimates in the last 7 days, the Zacks Consensus Estimate declined 2 cents. Estimate revisions over the past month have resulted in the Consensus Estimate slipping 1 cent, respectively, for the next quarter and for fiscal 2010. Conversely, earnings estimate for fiscal 2011 moved up 7 cents as a result of analyst revisions. The current Zacks Consensus Estimates are $1.23, $4.84 and $6.55, respectively, for second quarter 2010, fiscal 2010 and fiscal 2011. Maintain Neutral Murphy continues to augment shareholder value by maintaining a superior E&P production profile. During the quarter, the company made steady progress on the production front, improving 24% year over year to 196,226 equivalent barrels per day, of which 70% was oil. In the first quarter, the company continued to ramp up production at projects started last year, including Thunder Hawk field in the Gulf of Mexico, Tupper field in British Columbia, Kikeh field offshore Sabah, and Azurite field offshore the Republic of Congo. Furthermore, the company announced successful well results at DC4 in the Gulf of Mexico, at the Dolfin prospect offshore Sabah, Malaysia, and in the Eagle Ford shale onshore Texas, all of which started this calendar year. Conversely, the quarter concluded with …

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Murphy Oil: Earnings Scorecard – Analyst Blog

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