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Delek (DK) Q1 Loss Narrower Than Expected, Sales Decline Y/Y
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Delek US Holdings, Inc. (DK - Free Report) reported first-quarter 2024 adjusted net loss of 41 cents per share, narrower than the Zacks Consensus Estimate of a loss of 56 cents per share, owing to lower year-over-year operating costs. However, the figure deteriorated from the year-ago quarter’s profit of $1.37 per share. The underperformance could be attributed to the Refining segment's weak year-on-year contributions.
Net revenues decreased 17.7% year over year to $3.2 billion and missed the consensus mark of $3.6 billion.
The diversified downstream energy company’s adjusted EBITDA came in at $158.7 million compared with $284.6 million in the year-ago period.
On May 2, DK’s board of directors approved a 2% increase in regular dividends, bringing the quarterly payout to 25 cents per share. The dividend was paid out on May 24, 2024, to shareholders of record as of May 17.
Delek US Holdings, Inc. Price, Consensus and EPS Surprise
Refining: The segment's adjusted EBITDA was $106.1 million, reflecting a decline from the prior-year quarter's profit of $192.1 million. This significant year-over-year decline can be attributed to lower refining crack spreads. During the first quarter of 2024, DK's benchmark crack spreads fell by an average of 22.2% from prior-year levels. However, the reported figure beat our prediction of a profit of $93.1 million.
Logistics: This unit represents Delek’s majority interest in Delek Logistics Partners, L.P. — a publicly traded master limited partnership that owns, operates, develops, and acquires pipelines and other midstream assets.
During the first quarter, the segment registered an adjusted EBITDA of $99.7 million compared with $91.4 million in the year-ago quarter. However, the figure missed our projection of $100.7 million. The year-over-year growth can be attributed to strong contributions from Delaware Gathering systems, as well as annual rate increases.
Retail: The segment registered an adjusted EBITDA of $6.5 million during the reported quarter compared with $6.4 million in the year-ago period. However, the figure missed our projection of $8.8 million.
Merchandise sales of $70.7 million declined from the year-ago quarter’s reported figure of $73.9 million. The figure also marginally missed our estimate by 0.1 %. The merchandise margin increased to 33.5% from the year-ago quarter's reported figure of 33%.
Oil and gas refining and marketing company’s retail stations sold 39,683 thousand gallons of gasoline compared with 39,964 in the corresponding period of 2023.
Financials
Total operating expenses in the first quarter decreased about 15.5% year over year to $3.2 billion. Delek spent $45.9 million on capital programs in the same time frame.
As of Mar 31, 2024, the company had cash and cash equivalents worth $9.7 million and long-term debt of $1.6 billion, with debt to total capital ratio of about 70.7%.
2024 Guidance
For full-year 2024, this Zacks Rank #3 (Hold) company expects capital expenditures of approximately $330 million as it plans to spend $220 million on Refining, $70 million on Logistics (Delek Logistics Partners), $15 million on Retail and $25 million on Corporate/Other. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For the second quarter, the company anticipates operating costs in the band of $215-$225 million, general and administrative expenses in the range of $60-$65 million, and depreciation and amortization costs between $90 million and $95 million. It also projects net interest expenses in the $80-$90 million range.
The company anticipates a total crude throughput of 287,000-300,000 barrels per day (bpd) and a total throughput of 299,000-312,000 bpd during the same time frame.
Important Energy Earnings So Far
While we have discussed DK’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
Independent oil and natural gas company Magnolia Oil & Gas Corporation (MGY - Free Report) announced first-quarter 2024 adjusted net income of 49 cents per share, which beat the Zacks Consensus Estimate of 44 cents. However, the bottom line deteriorated from the year-ago quarter’s level of 56 cents.
Total revenues came in at $319.4 million, which beat the Zacks Consensus Estimate of $308 million. The top line also improved 3.6% from $308.4 million recorded in the year-ago period. As of Mar 31, 2024, the company had cash and cash equivalents worth $399.3 million and long-term debt of $393.5 million, with debt to total capital of about 17.2%.
SLB (SLB - Free Report) , the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported first-quarter 2024 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure, however, was above our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. The figure was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.
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Delek (DK) Q1 Loss Narrower Than Expected, Sales Decline Y/Y
Delek US Holdings, Inc. (DK - Free Report) reported first-quarter 2024 adjusted net loss of 41 cents per share, narrower than the Zacks Consensus Estimate of a loss of 56 cents per share, owing to lower year-over-year operating costs. However, the figure deteriorated from the year-ago quarter’s profit of $1.37 per share. The underperformance could be attributed to the Refining segment's weak year-on-year contributions.
Net revenues decreased 17.7% year over year to $3.2 billion and missed the consensus mark of $3.6 billion.
The diversified downstream energy company’s adjusted EBITDA came in at $158.7 million compared with $284.6 million in the year-ago period.
On May 2, DK’s board of directors approved a 2% increase in regular dividends, bringing the quarterly payout to 25 cents per share. The dividend was paid out on May 24, 2024, to shareholders of record as of May 17.
Delek US Holdings, Inc. Price, Consensus and EPS Surprise
Delek US Holdings, Inc. price-consensus-eps-surprise-chart | Delek US Holdings, Inc. Quote
Segmental Performances
Refining: The segment's adjusted EBITDA was $106.1 million, reflecting a decline from the prior-year quarter's profit of $192.1 million. This significant year-over-year decline can be attributed to lower refining crack spreads. During the first quarter of 2024, DK's benchmark crack spreads fell by an average of 22.2% from prior-year levels. However, the reported figure beat our prediction of a profit of $93.1 million.
Logistics: This unit represents Delek’s majority interest in Delek Logistics Partners, L.P. — a publicly traded master limited partnership that owns, operates, develops, and acquires pipelines and other midstream assets.
During the first quarter, the segment registered an adjusted EBITDA of $99.7 million compared with $91.4 million in the year-ago quarter. However, the figure missed our projection of $100.7 million. The year-over-year growth can be attributed to strong contributions from Delaware Gathering systems, as well as annual rate increases.
Retail: The segment registered an adjusted EBITDA of $6.5 million during the reported quarter compared with $6.4 million in the year-ago period. However, the figure missed our projection of $8.8 million.
Merchandise sales of $70.7 million declined from the year-ago quarter’s reported figure of $73.9 million. The figure also marginally missed our estimate by 0.1 %. The merchandise margin increased to 33.5% from the year-ago quarter's reported figure of 33%.
Oil and gas refining and marketing company’s retail stations sold 39,683 thousand gallons of gasoline compared with 39,964 in the corresponding period of 2023.
Financials
Total operating expenses in the first quarter decreased about 15.5% year over year to $3.2 billion. Delek spent $45.9 million on capital programs in the same time frame.
As of Mar 31, 2024, the company had cash and cash equivalents worth $9.7 million and long-term debt of $1.6 billion, with debt to total capital ratio of about 70.7%.
2024 Guidance
For full-year 2024, this Zacks Rank #3 (Hold) company expects capital expenditures of approximately $330 million as it plans to spend $220 million on Refining, $70 million on Logistics (Delek Logistics Partners), $15 million on Retail and $25 million on Corporate/Other. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For the second quarter, the company anticipates operating costs in the band of $215-$225 million, general and administrative expenses in the range of $60-$65 million, and depreciation and amortization costs between $90 million and $95 million. It also projects net interest expenses in the $80-$90 million range.
The company anticipates a total crude throughput of 287,000-300,000 barrels per day (bpd) and a total throughput of 299,000-312,000 bpd during the same time frame.
Important Energy Earnings So Far
While we have discussed DK’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
Independent oil and natural gas company Magnolia Oil & Gas Corporation (MGY - Free Report) announced first-quarter 2024 adjusted net income of 49 cents per share, which beat the Zacks Consensus Estimate of 44 cents. However, the bottom line deteriorated from the year-ago quarter’s level of 56 cents.
Total revenues came in at $319.4 million, which beat the Zacks Consensus Estimate of $308 million. The top line also improved 3.6% from $308.4 million recorded in the year-ago period. As of Mar 31, 2024, the company had cash and cash equivalents worth $399.3 million and long-term debt of $393.5 million, with debt to total capital of about 17.2%.
SLB (SLB - Free Report) , the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported first-quarter 2024 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure, however, was above our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. The figure was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.