Marathon Oil Corp.: Volatile 4Q Results in $41 Million Loss

March 19, 2009
Lower crude prices and impairment charge impact year-end quarterly earnings

Marathon Oil Corp. ended the final three months of 2008 with a $41 million loss, stemming from an impairment charge of $1.4 billion and declining crude prices. The 2008 IW 50 Best Manufacturer posted net income of $668 million, or 94 cents per share, during the year-earlier period.

For the year, profit fell to $3.5 billion, or $4.95 a share, compared with net income of $4.6 billion, or $6.47 a share, in 2007. Company president and CEO Clarence Cazalot Jr. attributed the drop-off to price swings.

"2008 was a year of extreme market volatility with record high crude prices at midyear, followed by rapid and steep decline in crude prices," he said when earnings were announced Feb. 3.

Marathon Oil Corp.
At A Glance

Marathon Oil Corp.
Houston, Texas
Primary Industry: Petroleum & Coal Products
Number of Employees: 29,524
2007 In Review
Revenue: $64.66 billion
Profit Margin: 6.12%
Sales Turnover: 1.51
Inventory Turnover: 15.23
Revenue Growth: -0.61%
Return On Assets: 12.83%
Return On Equity: 27.08%
But Cazalot added that oil production and growth was strong during the fourth quarter, resulting in income from its operating segments increasing 59% in the fourth quarter and 15% for the year.

"Our upstream business delivered growth again in the fourth quarter with production available for sale increasing 3% over the third-quarter 2008 and 14% over the fourth-quarter 2007, resulting in one of the strongest production quarters in the history of the company," he said.

Meanwhile, the Associated Press reported March 9 that Cazalot saw his total compensation fall 36% to $8.34 million in 2008 related to lower bonuses and stock-options value.

Cazalot received performance and other bonuses totaling $3.78 million in 2008, down from the $6.26 million he received the previous year, when the company's stock price increased 26%, the AP reported.

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About the Author

Jonathan Katz | Former Managing Editor

Former Managing Editor Jon Katz covered leadership and strategy, tackling subjects such as lean manufacturing leadership, strategy development and deployment, corporate culture, corporate social responsibility, and growth strategies. As well, he provided news and analysis of successful companies in the chemical and energy industries, including oil and gas, renewable and alternative.

Jon worked as an intern for IndustryWeek before serving as a reporter for The Morning Journal and then as an associate editor for Penton Media’s Supply Chain Technology News.

Jon received his bachelor’s degree in Journalism from Kent State University and is a die-hard Cleveland sports fan.

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