Marathon Oil Corp. (NYSE:MRO)

The financial data over the period reveals significant fluctuations in revenues and profitability metrics, indicating periods of both growth and decline.

Revenues

Revenues initially increased steadily from 63,311 million USD in 2005 to a peak of 77,193 million USD in 2008, reflecting strong operational performance during this timeframe. Following this peak, revenues saw a sharp decline in 2009 to 53,470 million USD. After a recovery period reaching 72,321 million USD in 2010, a notable and abrupt drop occurred in 2011 to 14,663 million USD, which may indicate a structural or reporting change or significant asset sales or divestitures. Revenues then remained relatively low and volatile between 4,000 to 15,000 million USD from 2012 to 2021, with no clear upward trend and ending at 5,601 million USD in 2021. This long-term decrease signals a substantial contraction in the company’s revenue-generating activities or a shift in business focus.

Income (loss) from operations

Income from operations demonstrated a positive trend from 2005 through 2008, peaking at 8,967 million USD in 2006 and remaining above 5,000 million USD until 2010. A marked decline is evident after 2010, consistent with the revenue drop, with operating income decreasing sharply but remaining positive through 2012 to 2014. From 2014 onwards, operating income exhibited considerable volatility, including negative values in 2015 (-2,691 million USD) and 2016 (-900 million USD), followed by near breakeven and fluctuating positive figures in subsequent years. This volatility and tendency towards operating losses during several years highlight challenges related to operational efficiency or external market conditions impacting profit generation.

Net income (loss)

Net income followed a similar pattern to revenues and operating income initially, with solid positive income between 2005 and 2010, ranging from approximately 1,463 million USD to 5,234 million USD. After 2010, net income showed pronounced instability, including large losses in 2015 (-2,204 million USD), 2016 (-2,140 million USD), and a considerable loss in 2017 (-5,723 million USD). Occasional returns to profitability occurred, such as modest gains in 2018 and 2021. This suggests that the company faced recurring non-operational challenges or exceptional losses besides operational difficulties, impacting the bottom line significantly in certain years.

Overall, the data indicates a period of strong financial performance through 2010, followed by notable declines in revenue, operating income, and net income. These trends imply significant structural changes or external pressures affecting the company’s financial health during the 2011-2021 period. The volatility in income figures and persistent losses in the mid to late 2010s suggest ongoing challenges in restoring profitability and operational stability.

The analysis of the annual financial data reveals several notable patterns and trends in the company's asset base over the observed period.

Current Assets

The current assets exhibit significant fluctuations throughout the years. Initially, they increased steadily from 9,383 million USD at the end of 2005 to a peak of 13,829 million USD at the end of 2010. However, after this peak, there is a sharp decline in current assets in 2011 to 3,224 million USD, followed by continued volatility with values oscillating between approximately 2,500 million and 3,700 million USD until 2019.

From 2019 onward, a declining trend is observed with current assets falling from 2,135 million USD at the end of 2019 to 1,612 million USD in 2020, before a slight recovery to 1,821 million USD in 2021. Overall, the data indicate a substantial decrease in current assets after 2010, with values stabilizing at a lower level in the last years of the period analyzed.

Total Assets

Total assets demonstrate a different pattern compared to current assets. A general upward trend is visible from 2005 through 2010, with assets increasing from 28,498 million USD to a maximum of 50,014 million USD in 2010. This increase suggests significant growth or acquisition activities during this time frame.

After 2010, total assets decline sharply to 31,371 million USD in 2011. Thereafter, a gradual decrease continues, with some minor fluctuations, reaching 16,994 million USD by the end of 2021. This indicates a significant contraction in the asset base over the subsequent years, with total assets reduced by more than 60% from the 2010 peak.

Insights and Interpretation

The contrasting trends between current and total assets post-2010 suggest major restructuring or divestment actions that significantly reduced both short-term and long-term asset holdings. The rapid decline in current assets following 2010, coupled with the sharp decrease in total assets that same year, points toward a pivotal year in the company’s asset management strategy or operational conditions.

While current assets stabilized at lower levels after a few years of volatility, total assets continued to trend downward steadily, highlighting a possible strategic shift towards leaner asset utilization or disposal of non-core assets. The slight recovery in current assets by 2021 might indicate improved liquidity management or shifts in working capital components.

Current liabilities

The current liabilities fluctuate significantly over the analyzed period. Beginning at 8,154 million USD in 2005, there is an increase peaking at 11,260 million USD in 2007, followed by a general decline with some volatility until 2014, reaching a low of 1,729 million USD. From 2015 onward, current liabilities remain relatively stable, fluctuating between approximately 1,600 and 2,200 million USD before dropping to 1,213 million USD in 2020 and modestly rising again in 2021. This pattern suggests a significant reduction in short-term obligations after 2007 and a more conservative or optimized working capital management in recent years.

Total liabilities

Total liabilities show a declining trend from 16,358 million USD in 2005 to 6,308 million USD in 2021. The data reveals a substantial rise to 23,523 million USD in 2007 and a peak during 2009 at 25,142 million USD, likely reflecting increased financing or obligations during periods of expansion or market conditions. After 2009, total liabilities steadily decrease with minor fluctuations, reaching the lowest values in the final years of the series. This long-term decline suggests a strategic reduction in overall debt or liabilities, possibly indicating improved financial stability or deleveraging efforts.

Commercial paper and long-term debt, including current portion

This category displays significant variability, rising sharply from 4,013 million USD in 2005 to a peak of 8,532 million USD in 2009. Subsequently, there is a downward trend overall, with some fluctuations, moving to 4,014 million USD by 2021. The peak in 2009 could be associated with increased capital raising activities during that period, possibly to support growth or manage liquidity. The decline in later years points to debt repayment or refinancing strategies aimed at reducing interest burden or improving leverage ratios.

Stockholders’ equity

Stockholders’ equity generally increases from 11,705 million USD in 2005 to a high of 23,771 million USD in 2010, indicating growth in retained earnings or capital contributions. After 2010, equity declines markedly, down to 10,686 million USD in 2021. The initial increase suggests strong profitability or value creation until 2010, while the subsequent decline may reflect dividend distributions, share repurchases, or losses impacting retained earnings. The falling equity in the face of decreasing liabilities could also signal changes in asset valuations or capital structure adjustments.

The analysis of the cash flow activities over the periods reveals several notable trends in the company's financial behavior.

Net cash provided by operating activities

The cash generated from operations exhibits an overall fluctuating trend. Starting at $4,738 million in 2005, there was a general increase reaching a peak of $6,782 million in 2008. This was followed by a decline to $4,017 million in 2012. From 2013 onward, cash from operations remained volatile, with values dipping sharply in 2015 and 2016 to $1,565 million and $1,073 million respectively, before partially recovering to $3,239 million by 2021. The variability suggests sensitivity to operational or market conditions impacting cash generation.

Net cash used in investing activities

Investment cash flows consistently show negative values across all periods, indicating ongoing capital expenditures or acquisitions. The outflows fluctuate substantially, ranging from approximately -$8,102 million in 2007 to a much lower outflow of -$874 million in 2016. This pattern suggests periods of aggressive investment followed by more conservative spending or divestment phases. The largest investment outlays occurred before 2012, with a clear reduction in cash used for investing activities evident in subsequent years.

Net cash provided by (used in) financing activities

Financing cash flows vary considerably, shifting between positive and negative values. Early periods like 2005 and 2006 show negative cash flows, indicating net debt repayments or share buybacks. Conversely, years such as 2007 and 2012 report positive inflows, possibly due to new debt issuance or equity financing. From 2013 onward, financing activities exhibit instability with predominantly negative flows, reflecting ongoing repayments or reductions in financing sources. The significant negative cash flow of -$2,391 million in 2021 marks one of the largest net outflows in this category.

Basic and Diluted Earnings Per Share (EPS)

Both basic and diluted EPS exhibit a generally volatile trend over the examined period. Initially, the EPS rose sharply from 4.26 USD in 2005 to a peak of approximately 7.31 USD in 2006, followed by a gradual decline and fluctuation in subsequent years. A notable decline occurred during the years 2014 and 2015, when EPS values turned negative, reaching lows of around -6.73 USD in 2017. After 2017, the EPS demonstrates some recovery, returning to positive territory with modest gains, though the values remain relatively low, generally below the early period highs. This indicates periods of financial difficulty or volatility impacting profitability, especially between 2014 and 2017.

Dividend Per Share

Dividend per share shows a more stable, though slightly declining pattern compared to EPS. Initially, dividends increased steadily from 0.60 USD in 2005 to a peak of 0.99 USD around 2010. After this peak, dividends gradually decreased, with notable reductions starting from 2011 onward. By 2015, the dividend dropped significantly to 0.20 USD and remained relatively flat through 2019. There was a further decrease in 2020, reaching 0.08 USD, and a slight increase to 0.18 USD in 2021. This trend suggests a conservative approach to dividend payouts possibly due to earnings volatility or financial strain during the latter years.

Overall Insights

The company experienced high earnings volatility throughout the period with significant negative earnings from 2014 through 2017. During these years of negative earnings, dividend payments were substantially reduced, indicating possible efforts to preserve cash or reduce shareholder payouts in response to profitability challenges. Although there are signs of recovery in earnings towards the end of the dataset, profitability remains modest compared to earlier years. Dividends have not returned to earlier peak levels, reflecting a cautious dividend policy in line with the company’s fluctuating financial performance.