Marathon Petroleum Corporation MPC is set to release fourth-quarter results on Feb 2. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 47 cents per share on revenues of $18.6 billion.
Let’s delve into the factors that might have influenced the independent oil refiner and marketer’s results in the June quarter. But it’s worth taking a look at Canadian Natural Resources’ previous-quarter performance first.
Highlights of Q3 Earnings & Surprise History
In the last-reported quarter, the Findlay, OH-based downstream operator beat the consensus mark on stronger-than-expected performance from both segments. Precisely, operating income from the Refining & Marketing and the Midstream units totaled $509 million and $1 billion, respectively, ahead of their Zacks Consensus Estimate of $484 million and $984 million. Marathon Petroleum had reported adjusted earnings per share of 73 cents, beating the Zacks Consensus Estimate by a penny. Total revenues of $32.6 billion had also outperformed the Zacks Consensus Estimate by 90.5%.
Marathon Petroleum beat the Zacks Consensus Estimate in each of the last four quarters, delivering an earnings surprise of 39.1%, on average. This is depicted in the graph below:
Marathon Petroleum Corporation Price and EPS Surprise
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line has been revised 2.2% upward in the last seven days. The estimated figure indicates a 150% surge year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 2.1% increase from the year-ago period.
Factors to Consider
In the third quarter of 2021, the company’s refining margin had surged 75.2% to $14.51 per barrel from the year-ago level of $8.28. Moreover, throughput rose from 2,536 thousand barrels per day (mbpd), in the year-ago quarter to 2,836 mbpd. The positive momentum is most likely to have continued in the fourth quarter, thanks to a marked improvement in fuel demand on the back of rebounding road and airline travel, which pushed up crude differentials and margins. Consequently, the Zacks Consensus Estimate for Marathon Petroleum’s Refining & Marketing segment operating income is pegged at $335 million, turning around from the prior-year quarter’s loss of $1.6 billion. This is likely to have buoyed the fourth-quarter results of Marathon Petroleum.
On a somewhat bearish note, Marathon Petroleum’s total operating cost in the third quarter increased more than 68% year over year to $31.3 billion. The upward cost trajectory is likely to have continued in the fourth quarter due to Hurricane-Ida related expenses and planned turnaround budget. This is expected to have somewhat dented the company’s to-be-reported earnings.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Marathon Petroleum is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Marathon Petroleum has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 47 cents per share each.
Zacks Rank: Marathon Petroleum currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for Marathon Petroleum, here are some firms from the energy space that you may want to consider on the basis of our model:
ExxonMobil XOM has an Earnings ESP of +5.51% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 1.
You can see the complete list of today’s Zacks #1 Rank stocks here.
XOM beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 54.7%. ExxonMobil has rallied around 77.9% in a year.
Murphy USA MUSA has an Earnings ESP of +28.82% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 2.
MUSA beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 20.9%. Murphy USA has gained around 52.3% in a year.
ConocoPhillips COP has an Earnings ESP of +2.54% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Feb 3.
COP beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 13%. ConocoPhillips has rallied around 131.7% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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