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Western Refining (WNR) Beats on Q2 Earnings & Revenues
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Oil refiner and marketer Western Refining Inc.’s second-quarter 2016 earnings per share (excluding special items) came in at 72 cents, surpassing the Zacks Consensus Estimate of 51 cents following strong retail fuel volume. The bottom line, however, decreased from the year-ago adjusted figure of $1.44 due to lower refining margins and higher operating expenses.
Quarterly net sales of $2,107.3 million beat the Zacks Consensus Estimate of $2,082 million. However, the top line decreased 25.5% from the year-ago quarter level.
Refining Segment: Analysis
Throughput: Total refining throughput averaged 159,778 barrels per day (Bbl/d) compared with 162,001 Bbl/d in the year-ago quarter. Throughput volumes at the El Paso refinery fell 1.3% year over year to 132,642 Bbl/d. The Gallup unit recorded throughput volumes of 27,136 Bbl/d, down 2.2% from the year-earlier level.
Refining Margins: Gross refining margin recorded a year-over-year decline from $19.62 to $13.55 per barrel. Geographically, refining margin plunged 29.3% to $14.14 per barrel at El Paso and decreased nearly 40.4% to $13.50 per barrel at Gallup.
Operating Expenses: Direct operating expenses at El Paso averaged $4.26 per barrel, 2.2% higher year over year. Moreover, direct operating expenses at Gallup increased about 6% year over year to $8.28 per barrel. Combined direct operating expenses at Western Refining’s units were $5.46 per barrel in the three months ended Jun 30, 2016. This is higher than $5.20 per barrel in the year-ago period.
Capital Expenditure & Balance Sheet
El Paso, TX-based Western Refining’s total capital spending during the quarter was $77.7 million. This was much higher than $66.4 million in the second quarter of 2015. As of Jun 30, 2016, Western Refining had cash and cash equivalents of $198.3 million and total debt of approximately $2,068.7 million. This represents a debt-to-capitalization ratio of 49.8%.
Outlook
The company revealed that the third quarter had a reassuring start with demand for gasoline remaining favorable. We expect this to turn into good fortune unless any adversity crops up.
Western Refining currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked players in the energy sector include Antero Resources Corporation (AR - Free Report) , Enbridge Inc. (ENB - Free Report) and Murphy USA Inc. (MUSA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Western Refining (WNR) Beats on Q2 Earnings & Revenues
Oil refiner and marketer Western Refining Inc.’s second-quarter 2016 earnings per share (excluding special items) came in at 72 cents, surpassing the Zacks Consensus Estimate of 51 cents following strong retail fuel volume. The bottom line, however, decreased from the year-ago adjusted figure of $1.44 due to lower refining margins and higher operating expenses.
Quarterly net sales of $2,107.3 million beat the Zacks Consensus Estimate of $2,082 million. However, the top line decreased 25.5% from the year-ago quarter level.
Refining Segment: Analysis
Throughput: Total refining throughput averaged 159,778 barrels per day (Bbl/d) compared with 162,001 Bbl/d in the year-ago quarter. Throughput volumes at the El Paso refinery fell 1.3% year over year to 132,642 Bbl/d. The Gallup unit recorded throughput volumes of 27,136 Bbl/d, down 2.2% from the year-earlier level.
Refining Margins: Gross refining margin recorded a year-over-year decline from $19.62 to $13.55 per barrel. Geographically, refining margin plunged 29.3% to $14.14 per barrel at El Paso and decreased nearly 40.4% to $13.50 per barrel at Gallup.
Operating Expenses: Direct operating expenses at El Paso averaged $4.26 per barrel, 2.2% higher year over year. Moreover, direct operating expenses at Gallup increased about 6% year over year to $8.28 per barrel. Combined direct operating expenses at Western Refining’s units were $5.46 per barrel in the three months ended Jun 30, 2016. This is higher than $5.20 per barrel in the year-ago period.
Capital Expenditure & Balance Sheet
El Paso, TX-based Western Refining’s total capital spending during the quarter was $77.7 million. This was much higher than $66.4 million in the second quarter of 2015. As of Jun 30, 2016, Western Refining had cash and cash equivalents of $198.3 million and total debt of approximately $2,068.7 million. This represents a debt-to-capitalization ratio of 49.8%.
Outlook
The company revealed that the third quarter had a reassuring start with demand for gasoline remaining favorable. We expect this to turn into good fortune unless any adversity crops up.
WESTERN REFING Price, Consensus and EPS Surprise
WESTERN REFING Price, Consensus and EPS Surprise | WESTERN REFING Quote
Zacks Rank and Other Key Picks
Western Refining currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked players in the energy sector include Antero Resources Corporation (AR - Free Report) , Enbridge Inc. (ENB - Free Report) and Murphy USA Inc. (MUSA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>