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What's in the Cards for Murphy Oil (MUR) in Q2 Earnings?

Murphy Oil Corporation MUR is slated to report second-quarter financial results on Aug 6, before the opening bell. The company has a trailing four-quarter earnings surprise of 31.98%, on average. 

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors to Consider

The outbreak of the novel coronavirus caused an unprecedented economic distress, which in turn, induced a sharp decline in demand and crude oil prices. To counter this, Murphy Oil undertook various cost-saving initiatives to preserve liquidity and cash flow duringthe pandemic.

The company also hedged a portion of its expected second-quarter production to safeguard its interest against the falling prices. Despite such initiatives, its June-quarter earnings performance is likely to have been adversely impacted by the current market volatility. 

Q2 Expectations

The Zacks Consensus Estimate for second-quarter 2020 sales is pegged at $385.7 million, indicating a decline of 45.60% from the year-ago quarter’s reported figure. The consensus estimate for second-quarter loss of $1.05 per share implies a 600% plunge from the prior-year quarter’s reported number.

The consensus mark for the company’s second-quarter total crude oil production is pinned at 106.14 thousand barrels of oil per day (MBOPD).

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Murphy Oil this time around. 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 is not the case as you see below.

Murphy Oil Corporation Price and EPS Surprise

Murphy Oil Corporation Price and EPS Surprise

Murphy Oil Corporation price-eps-surprise | Murphy Oil Corporation Quote

Earnings ESP: Murphy Oil has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Murphy Oil currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Investors can consider thefollowing players from the same industry, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.

Cimarex Energy Co XEC is slated to release second-quarter 2020 numbers on Aug 5. It has an Earnings ESP of +1.90% and a Zacks Rank of 2, currently.

Bonanza Creek Energy, Inc. BCEI is expected to release second-quarter 2020 numbers on Aug 6. It has an Earnings ESP of +13.66% and a Zacks Rank of 1 at present.

EOG Resources, Inc. EOG is set to release second-quarter earnings on Aug 7. It has an Earnings ESP of +2.48% and a Zacks Rank #2, presently.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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