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Can Marathon (MPC) Q4 Earnings Maintain the Beat Streak?

Marathon Petroleum Corporation MPC is set to release fourth-quarter results on Jan 31. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $5.54 per share on revenues of $32 billion.

Let’s delve into the factors that might have influenced the independent oil refiner and marketer’s results in the December quarter. But it’s worth taking a look at MPC’s previous-quarter performance first.

Highlights of Q3 Earnings & Surprise History

In the last-reported quarter, the Findlay, OH-based downstream operator handily beat the consensus mark on stronger-than-expected performance of its Refining & Marketing segment, whose operating income totaled $4.6 billion, ahead of its Zacks Consensus Estimate by 23.2%.

MPC had reported adjusted earnings per share of $7.81, well above the Zacks Consensus Estimate of $6.80. Revenues of $47.2 billion generated by the firm also came in above the Zacks Consensus Estimate by 32.4%.

Marathon Petroleum beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 60.1%, on average. This is depicted in the graph below:

Marathon Petroleum Corporation Price and EPS Surprise

Marathon Petroleum Corporation Price and EPS Surprise
Marathon Petroleum Corporation Price and EPS Surprise

Marathon Petroleum Corporation price-eps-surprise | Marathon Petroleum Corporation Quote

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Trend in Estimate Revision

The Zacks Consensus Estimate for the fourth-quarter bottom line has been revised 3.5% downward in the past seven days. The estimated figure indicates a 326.2% jump year over year. However, the Zacks Consensus Estimate for revenues suggests a 10.1% decrease from the year-ago period.

Factors to Consider

MPC is expected to have benefited from the strength in refining margins. In the third quarter of 2022, the company’s refining margin of $30.21 per barrel rocketed from $14.51 a year ago. Moreover, throughput rose from 2,836 thousand barrels per day (mbpd) in the third quarter of 2021 to 3,007 mbpd.

Despite softening from the spectacular highs of the June quarter, the overall positive momentum is most likely to have continued in the fourth quarter, thanks to the strength 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 $2.8 billion, increasing exponentially from the prior-year quarter’s profit of just $881 million. This is likely to have buoyed the fourth-quarter results of Marathon Petroleum.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for Marathon Petroleum this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

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

Marathon Petroleum has an Earnings ESP of +0.31% and a Zacks Rank #3.

Other Stocks to Consider

Marathon Petroleum is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:

Patterson-UTI Energy PTEN has an Earnings ESP of +5.53% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 8.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Patterson-UTI Energy topped the Zacks Consensus Estimate by an average of 169.2% in the trailing four quarters, including a 47.4% beat in the last reported quarter. Valued at around $3.5 billion, PTEN has gained 57.4% in a year.

Exxon Mobil Corporation XOM has an Earnings ESP of +5.09% and a Zacks Rank #3. The firm is scheduled to release earnings on Jan 31.

ExxonMobil beat the Zacks Consensus Estimate for earnings in three of the last four quarters. It has a trailing four-quarter earnings surprise of 5.1%, on average. Valued at around $464.4 billion, XOM has gained 51.9% in a year.

Enterprise Products Partners L.P. EPD has an Earnings ESP of +3.07% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 1.

For 2022, Enterprise Products Partners has a projected earnings growth rate of 18.1%. Valued at around $56.8 billion, EPD has gained 8.8% in a year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

PattersonUTI Energy, Inc. (PTEN) : Free Stock Analysis Report

Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report

Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report

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