Ohio-based independent oil refiner and marketer
Marathon Petroleum Corporation
) is set to release first-quarter 2014 results before the opening
bell on May 1, 2014. Last quarter, the company posted an earnings
surprise of 79.49%. Let's see how things are shaping up for this
Factors to Influence This Quarter
Marathon Petroleum is the fourth largest domestic refiner with
a combined crude oil processing capacity of approximately 1.7
million barrels per day through its portfolio of seven
refineries. A major advantage for the company is its proprietary
access to pipelines, which inhibits low-cost competitors from
supplying products in Marathon Petroleum's key markets.
Moreover, the fundamentals of the company look good. Marathon
Petroleum is in excellent financial health, with over $2 billion
in cash/cash equivalents and an investment-grade credit rating
with a debt-to-capitalization ratio of 23%.
Marathon Petroleum's total expenses have increased
considerably in fourth-quarter 2013, which is a matter of
concern. The company's total costs came in at$23.9 billion,
representing a substantial hike of 22.5% as compared to the
year-ago quarter. The company's results may get hampered if
expenses continue to rise at this rate.
Our proven model does not conclusively show that Marathon
Petroleum is likely to beat the Zacks Consensus Estimate this
quarter. This is because a stock needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately,
this is not the case here as elaborated below.
Zero Zacks ESP:
This is because both the Most Accurate estimate and the Zacks
Consensus Estimate are poised at $1.05. This leads to an ESP of
0.00% for Marathon Petroleum.
Zacks Rank #3 (Hold):
Marathon Petroleum's Zacks Rank #3 increases the predictive power
of ESP, but when combined with a zero ESP , it makes surprise
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into an earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies to consider as our model shows
these have the right combination of elements to post an earnings
beat this quarter.
Callon Petroleum Co.
) with Earnings ESP of +25.00% and Zacks Rank #2 (Buy). The
company is slated to release first-quarter earnings on May 8.
Canadian Natural Resources Ltd.
) with Earnings ESP of +8.22% and Zacks Rank #2. The company is
likely to release earnings after the closing bell on May 8.
Abraxas Petroleum Corp.
) with Earnings ESP of +20.00% and Zacks Rank #2. The company is
scheduled to release earnings on May 8.
ABRAXAS PETE/NV (AXAS): Free Stock Analysis
CDN NTRL RSRCS (CNQ): Free Stock Analysis
CALLON PETE-DEL (CPE): Free Stock Analysis
MARATHON PETROL (MPC): Free Stock Analysis
To read this article on Zacks.com click here.