Marathon Oil (MRO -0.7%) reports Q2 adjusted EPS of $0.59 vs. $0.96 Y/Y and analyst consensus...

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BTM Comments (153)
 
Why can't these guys hit their earnings estimates? This makes 3 in a row.

I beginning to think this company needs an activist investor involved.
1 Aug 2012, 11:22 AM Reply Like

jjmc2001 Comments (1092)
 
They have only been operating as a separate company for about a year and now their revenue is tied primarily to oil and natural gas prices. Their production estimates have been pretty accurate. Many of the EPS estimates you see quoted are from analysts as opposed to management. I will be listening to the conference to get more details.
1 Aug 2012, 02:55 PM Reply Like

BTM Comments (153)
 
Companies are rewarded for hitting analyst estimates. Thats the way the game is played.

I think they have been cut some slack because they split out their refining business as you pointed out. However that excuse is wearing thin.

Oil has been up and down over the last quater but it hasn't collapsed and I suspect it has averaged in the low $80s per barrel. MRO should do well in such climate. If not they have some serious problems and some 'splaining to do. The days of $100 barrel oil are over IMO. That price causes severe recessions in the developed economies of the West. Alternatives like NG will replace oil products if that price level of oli is sustained for any long period of time.
1 Aug 2012, 03:12 PM Reply Like

jjmc2001 Comments (1092)
 
I do understand how the game is played as I personally played it on both sides as CFO and analyst at various times. MRO stock price has been pretty predictable if you chart and correlate it to WTI pricing. Their domestic production has been above their forecasts. They have been hit by a slightly higher tax rate than some analysts suggested but most of this was attributable to foreign production as opposed to domestic (e.g. Norway).

I strongly suggest you listen to the last couple of conference calls of MRO if you have an interest in this company. The headlines and brief articles on MRO earnings for the last two quarters have been quite misleading. If you choose to listen to the conference call you will find a good deal of explanation of their activity in the Eagle Ford. In my opinion this is currently the most profitable domestic oil play and MRO has a good discussion of this on today's call.

If WTI stays above $75 MRO should perform with their peers. Margins should be improve as they pull back a bit on their Bakken drilling and continue as planned in the Eagle Ford. I will buy anytime the price gets below $25. I am currently long MRO but sold a large position several months ago when WTI pricing broke downward. MRO has been very good to me over the last two years but it does require some work to understand.
1 Aug 2012, 04:50 PM Reply Like