Murphy Oil Corp. Earnings: Profit Slides

S&P 500 (NYSE:SPY) component Murphy Oil Corporation (NYSE:MUR) reported its results for the third quarter. Murphy Oil is an oil and gas exploration and production company with refining and marketing operations in the U.S. and the United Kingdom.

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Murphy Oil Corporation Earnings Cheat Sheet

Results: Net income for Murphy Oil Corporation fell to $226.7 million ($1.16 per share) vs. $406.1 million ($2.09 per share) a year earlier. This is a decline of 44.2% from the year-earlier quarter.

Revenue: Fell 1.4% to $7.12 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Murphy Oil Corporation reported adjusted net income of $1.17 per share. By that measure, the company fell short of mean estimate of $1.20 per share. Analysts were expecting revenue of $7.21 billion.

Quoting Management: Steven A. Coss, President and Chief Executive Officer, commented, “Our Company has recently made a number of key moves that are expected to enhance shareholder value when completed. As previously announced, the Board of Directors has set in place a plan to separate our U.S. Downstream business, which principally consists of over 1,150 retail service stations throughout the South and Midwest United States. We expect that this separation will occur in 2013. This action will allow the two key businesses – worldwide Upstream and U.S. Downstream – to gain sharper focus by fully concentrating on their own specific priorities, including strategic initiatives, allocation ofresources and deployment of capital. Additionally, the Company will pay a special dividend of $2.50 per share on December 3 and has authorized a share buyback program of up to $1 billion. Furthermore, we are reviewing our portfolio of assets to rationalize their strategic fit within the organization; as part of this process, we have decided to sell our three oil and gas fields in the United Kingdom. This asset sale is expected to be completed by year-end.We anticipate total worldwide production volumes of 207,000 barrels of oil equivalent per day in the fourth quarter of 2012. Sales volumes of oil and natural gas are projected to average 206,000 barrels of oil equivalent per day in the fourth quarter 2012. At the present time, we expect income from continuing operations in the fourth quarter to range between $1.10 and $1.70 per diluted share. The fourth quarter estimate includes projected exploration expense of between $60 million and $190 million, and earnings from our downstream businesses of approximately $63 million. Results could vary based on the risk factors described below.”

Key Stats:

The company fell short of estimates last quarter after beating the mark the quarter before with net income of $1.52 versus a mean estimate of net income of $1.33 per share.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is $1.49 per share, up from $1.15 ninety days ago. Over the past three months, the average estimate for the fiscal year has climbed from $5.14 per to share to $5.70.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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