Marathon Oil Has Issues

Marathon Oil ( MRO) said second-quarter earnings will be handicapped by a trio of issues not currently reflected in existing analyst estimates.

The Houston oil giant must mark down a supply contract, will produce slightly less natural gas than previously thought, and faces higher administrative expenses in the quarter, it said in a release. The issues will be partially offset by an exploration expense that is at the low end of previous guidance.

Analysts were expecting the company to earn $1.13 a share in the second quarter. The stock was down $1.33, or 3.4%, to $36.53.

The gas-supply contract markdown comes to $95 million, reflecting a strengthening in the price of 18-month futures in the U.K. Meanwhile, administrative expenses in the second quarter will be about $23 million higher than previously estimated because of both outsourcing costs and a higher equity-based compensation expense.

Regarding output, Marathon put second-quarter worldwide production at 341,000 barrels of oil equivalent per day, compared with previous guidance of 348,000 barrels. It cited delays in a natural gas expansion in Equatorial Guinea.

More from Opinion

Elon Musk's Latest Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Latest Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Twitter Tirade Is the Dumbest Thing on Wall Street

Why Google's Search Momentum Won't Be Badly Hurt by New EU Rules

Why Google's Search Momentum Won't Be Badly Hurt by New EU Rules

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Time to Talk Tesla: What Happened This Week, Elon?

Time to Talk Tesla: What Happened This Week, Elon?