A month has gone by since the last earnings report for HollyFrontier . Shares have added about 9.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is HollyFrontier due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
HollyFrontier’s Q2 Earnings Better Than Expected
U.S. refiner HollyFrontier reported second-quarter 2021 adjusted net income per share of 87 cents beat the Zacks Consensus Estimate of 63 cents. The bottom line also rebounded from the year-ago quarter’s loss of 25 cents per share.
This outperformance can primarily be attributed to higher refining margins and throughput along with robust results from the refining as well as lubricants and specialty products divisions.
The U.S. refiner’s revenues of $4.58 billion beat the Zacks Consensus Estimate of $3.13 billion and improved 122.3% from second-quarter 2020 sales of $2.06 billion.
Segmental Information
Refining: Adjusted EBITDA, which is the main contributor to HollyFrontier’s earnings, was $211.2 million, reflecting a massive climb from the year-ago quarter’s income of $25 million. This upside is primarily attributable to solid product demand along with improved refinery gross margins, which were up 45% to $11.71 per barrel. Moreover, margins came above the Zacks Consensus Estimate of $11.41 per barrel.
Total refined product sales volumes averaged 443,940 barrels per day (bpd), up 27.2% from 348,890 bpd in the year-ago quarter. Moreover, throughput increased from 337,850 bpd in the year-ago quarter to 444,730 bpd. Capacity utilization was 102.8%, up from 77.1% in second-quarter 2020.
Lubricants and Specialty Products: EBITDA totaled $79.2 million against a loss of $189.5 million in the year-ago quarter, primarily reflecting a strong base oil margins. Product sales averaged 36,670 bpd, increasing from the prior-year level of 26,990 bpd. Throughput was also up 18% year over year to 19,310 bpd in the reported quarter.
HEP: This unit includes HollyFrontier’s majority interest in Holly Energy Partners L.P. (HEP Quick QuoteHEP - Research Report) , a publicly-traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.
Segmental EBITDA was $88.1 million, down from $112.5 million in the second quarter of 2020.
Balance Sheet
As of Jun 30, HollyFrontier had $1.4 billion in cash and cash equivalents, and $3.1 billion of long-term debt, representing a debt-to-capitalization of 33.9%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 11.14% due to these changes.
VGM Scores
Currently, HollyFrontier has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, HollyFrontier has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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HollyFrontier (HFC) Up 9.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for HollyFrontier . Shares have added about 9.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is HollyFrontier due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
HollyFrontier’s Q2 Earnings Better Than Expected
U.S. refiner HollyFrontier reported second-quarter 2021 adjusted net income per share of 87 cents beat the Zacks Consensus Estimate of 63 cents. The bottom line also rebounded from the year-ago quarter’s loss of 25 cents per share.
This outperformance can primarily be attributed to higher refining margins and throughput along with robust results from the refining as well as lubricants and specialty products divisions.
The U.S. refiner’s revenues of $4.58 billion beat the Zacks Consensus Estimate of $3.13 billion and improved 122.3% from second-quarter 2020 sales of $2.06 billion.
Segmental Information
Refining: Adjusted EBITDA, which is the main contributor to HollyFrontier’s earnings, was $211.2 million, reflecting a massive climb from the year-ago quarter’s income of $25 million. This upside is primarily attributable to solid product demand along with improved refinery gross margins, which were up 45% to $11.71 per barrel. Moreover, margins came above the Zacks Consensus Estimate of $11.41 per barrel.
Total refined product sales volumes averaged 443,940 barrels per day (bpd), up 27.2% from 348,890 bpd in the year-ago quarter. Moreover, throughput increased from 337,850 bpd in the year-ago quarter to 444,730 bpd. Capacity utilization was 102.8%, up from 77.1% in second-quarter 2020.
Lubricants and Specialty Products: EBITDA totaled $79.2 million against a loss of $189.5 million in the year-ago quarter, primarily reflecting a strong base oil margins. Product sales averaged 36,670 bpd, increasing from the prior-year level of 26,990 bpd. Throughput was also up 18% year over year to 19,310 bpd in the reported quarter.
HEP: This unit includes HollyFrontier’s majority interest in Holly Energy Partners L.P. (HEP Quick QuoteHEP - Research Report) , a publicly-traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.
Segmental EBITDA was $88.1 million, down from $112.5 million in the second quarter of 2020.
Balance Sheet
As of Jun 30, HollyFrontier had $1.4 billion in cash and cash equivalents, and $3.1 billion of long-term debt, representing a debt-to-capitalization of 33.9%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 11.14% due to these changes.
VGM Scores
Currently, HollyFrontier has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, HollyFrontier has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.