Murphy Oil (MUR) Q4 Earnings: What's in Store for the Stock?

Murphy Oil Corporation MUR is expected to report fourth-quarter 2016 results after the market closes on Jan 25. Last quarter, this oil and gas company reported a positive surprise of 14.29%. On an average, the company has delivered a positive earnings surprise of 21.14% over the four trailing quarters. Let’s find out what’s in store in this quarter.

Factors to Consider

Murphy Oil expects fourth-quarter production levels in the range of 162,000 to 164,000 barrels of oil equivalent per day (BOE/d). Production is expected to register a decline of 5,000 BOE/d on a sequential basis due to planned downtime of the Kikeh/Siakap North and Sarawak deepwater projects in Malaysia.

The company expects fourth-quarter oil sales volumes to be nearly 13,000 barrels per day lower than its average daily production. This will surely have a negative impact on its top line.

However, Murphy Oil is expected to benefit from the cost-saving initiatives undertaken in the fourth quarter. Moreover, the company is streamlining its operations through a systematic non-core asset divestment strategy, which we believe will boost its performance.

Earnings Whispers

Our proven model does not conclusively show that Murphy Oil is likely to beat estimates this quarter as it does not have the right combination of the two key ingredients. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat estimates. However, that is not the case here, as elaborated below.

Murphy Oil Corp. Price and EPS Surprise

 

Murphy Oil Corp. Price and EPS Surprise | Murphy Oil Corp. Quote

Zacks ESP: Murphy Oil has an Earnings ESP of 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 21 cents.

Zacks Rank: Although Murphy Oil’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

Note that we caution against Sell-rated stocks (#4 or #5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Price Movement

Over the last three months, Murphy Oil has outperformed the Zacks categorized Oil & Gas – Exploration and Production – U.S. industry. During this period, company’s shares gained 8.2%, compared with the industry’s return of 3.1%.

Stocks to Consider

Even though Murphy Oil failed to secure the required mix, here are a few oil and gas companies looking up this earnings season.

W&T Offshore, Inc. WTI is expected to release fourth-quarter 2016 results on Mar 14. The company has an Earnings ESP of +73.91% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Noble Midstream Partners LP NBLX has an Earnings ESP of +19.18% and a Zacks Rank #1. The company is expected to release fourth-quarter 2016 results on Feb 1.

EQT Corporation EQT has an Earnings ESP of +50.00% and a Zacks Rank #2. The company is expected to release fourth-quarter 2016 results before the market opens on Feb 2.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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EQT Corp. (EQT): Free Stock Analysis Report
 
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