Marathon Oil Corporation (NYSE:MRO) is poised to release its third-quarter results on November 1, with predictions indicating a year-over-year decline in both profits and revenues. The Zacks Consensus Estimate forecasts a profit of 69 cents per share (adjusted earnings) and revenues of $1.8 billion. These estimates suggest a drop of 44.4% in profits and 21.9% in revenues compared to the same period last year.
Despite these projections, the company has consistently outperformed estimates in the past, with the second quarter marking its fourth consecutive beat. In Q2, Marathon Oil reported adjusted earnings per share of 48 cents and revenues of $1.5 billion, exceeding expectations by an average surprise rate of 10.8%.
In terms of production volume, Marathon's high-margin U.S. resource plays are expected to perform well in Q3. Operations including Eagle Ford (NYSE:F), Bakken, Oklahoma, and Permian are predicted to yield a production volume of 352,000 barrels of oil equivalent per day (BOE/d), a significant increase from last year's volume of 205,000 BOE/d.
However, the company's key U.S. exploration and production (E&P) segment faces several challenges. These include a lower realized average liquids price estimated at $79.56 per barrel, increased production costs projected at $196.4 million, and a sharp 68.8% drop in realized natural gas prices year-over-year.
Furthermore, total expenses are expected to rise slightly due to inflationary pressures and a tight labor market. Despite these hurdles, Marathon Oil continues to focus on its high-margin U.S. resource plays which have consistently demonstrated strong performance.
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