Marathon Oil's Q3 net income down 42% to US$405M on US$227M charge tied to foreign tax credits, but revenue up 28% to US$3.8B

Graziela Medina Shepnick

Graziela Medina Shepnick

Nov 1, 2011 – Associated Press

HOUSTON , November 1, 2011 () – Marathon Oil Corp.'s third-quarter net income declined 42 percent, pulled down by a hefty charge tied to foreign tax credits. Its quarterly results missed Wall Street's expectations, and its stock fell in morning trading.

The exploration and production company earned $405 million, or 57 cents per share, for the three months ended Sept. 30. That compares with $696 million, or 98 cents per share, in the prior-year period.

Marathon Oil said Tuesday that it incurred a $227 million charge in the quarter because of excess foreign tax credits that it doesn't expect to be able use in the future, mostly because of a higher price and production outlook for Norway over the next several years.

Taking out deferred income tax items and a gain on a sale, income from continuing operations was 59 cents per share. Analysts expected earnings of 82 cents per share, according to a FactSet survey.

Marathon Oil's stock slipped 66 cents, or 2.5 percent, to $25.37 in morning trading. Over the past year, the shares have traded between $19.13 and $54.33.

Revenue climbed 28 percent to $3.8 billion from $2.96 billion, but widely missed Wall Street's $8.31 billion forecast.

Marathon Oil — which spun off refining operator Marathon Petroleum earlier this year — anticipates that its 2012 production will increase by 5 percent over 2011, excluding any Libyan production in both years. Next year's results will be helped by the Hicorp acquisition, which includes 141,000 net acres in the Eagle Ford shale in Texas.

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