Oil and natural gas company Marathon Oil Corp. (MRO) reported Wednesday a profit for the second quarter that declined from last year, reflecting higher income tax provisions and the gains from discontinued operations that boosted the year-ago quarter.
Adjusted earnings per share matched analysts' expectations, while quarterly revenues topped their estimates. The company also maintained its production guidance for the full-year 2012.
"Throughout the second quarter, Marathon Oil continued to execute well and reported another good quarter operationally. Our Exploration and Production (E&P) segment delivered production available for sale at the upper end of our guidance," Chairman, President and CEO Clarence Cazalot Jr. said in a statement.
The Houston, Texas-based company reported net income of $393 million or $0.56 per share for the second quarter, sharply lower than $996 million or $1.39 per share in the prior-year quarter.
On June 30, 2011, Marathon Oil completed the spin-off of its Refining, Marketing and Transportation business, now reported as discontinued operations. The prior year included a $698 million or $0.97 per share gain from discontinued operations.
Excluding special items, adjusted net income from continuing operations for the quarter decreased to $416 million or $0.59 per share from $689 million or $0.96 per share in the year-ago quarter.
On average, 19 analysts polled by Thomson Reuters expected the company to earn $0.59 per share in the second quarter. Analysts' estimates typically exclude special items.
Total revenues and other income for the quarter declined to $3.78 billion from $3.87 billion in the same quarter last year. Five Wall Street analysts had a consensus revenue estimate of $3.35 billion.
Exploration & Production sales volumes for the second quarter averaged 363,000 barrels of oil equivalent per day or boe/d, and production available for sale exceeded guidance and averaged 362,000 boe/d for the quarter. Both excluding Libya.
Meanwhile, production operations in Libya were suspended in the first quarter of 2011 and resumed with limited production, but no sales, in the fourth quarter of 2011. During the latest quarter, production available for sale averaged 44,000 boe/d, and net sales also averaged 44,000 boe/d.
Marathon's net synthetic crude oil sales were 44 million barrels per day or mb/d, compared to 41 mb/d last year, with average realization declining to $79.31 per barrel from $100.68 per barrel last year.
Provision for income taxes for the quarter was $1.03 billion, higher than $617 million in the year-ago quarter.
Looking ahead to 2012, Marathon Oil confirmed its estimated 5 percent year-over-year Upstream production growth, excluding Libya, and its 5 to 7 percent growth on a compound annual basis from 2010 through 2016.
The company also sees 2013 Upstream production to be 6 to 8 percent higher than 2012, excluding Libya and Alaska.
For the third quarter, Marathon Oil estimates E&P production available for sale to be between 365,000 and 380,000 boe/d, excluding Libya.
In Wednesday's regular trading session, MRO is currently trading at $26.21, down $0.26 or 0.98% on a volume of 3.22 million shares.
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