It has been about a month since the last earnings report for HollyFrontier Corporation . Shares have added about 10.4% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is HFC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Recent Earnings
HollyFrontier Corporation reported fourth-quarter 2017 net income per share (excluding special items) of 70 cents, below the Zacks Consensus Estimate of 82 cents. The weaker than expected results can be attributed to lower than expected refining margins. Notably, the refining margins in the quarter stood at $12.54 a barrel as against the Zacks Consensus Estimate of $13.15 a barrel.
However, the bottom line turned around from the year-ago period’s loss of 6 cents. Strong year-over-year results were driven by higher sales volume and stronger contribution across all segments.
Revenues of $3,992.7 million missed the Zacks Consensus Estimate of $4,310 million. However, the top line surged 35.1% from the fourth-quarter 2016 sales of $2,955.1 million.
Segmental Information
Refining: Net income from the Refining segment, which is the main contributor to HollyFrontier’s earnings, was $282.3 million, surging a whopping 475.5% from the year-ago income of $49 million. The improvement reflects wider gross margins, which jumped 85.2% to $12.54 per barrel.
Total refined product sales volume averaged 482,860 barrels per day (bpd), up 3.5% from 464,160 bpd in the year-ago quarter. Moreover, throughput increased from 497,450 bpd in the prior-year quarter to 466,640 bpd. Capacity utilization was 100.9%, up from 94.5% in fourth-quarter 2016.
Lubricants and Specialty Products: Income from the segment, totaled $29.3 million, up from $20.6 million reported in the year-ago quarter. Product sales averaged 29,670 bpd, significantly above the prior-year level of 11,230 bpd. Throughput came in at 20,990 bpd in the reported quarter.
HEP: This unit includes HollyFrontier’s 36% interest in Holly Energy Partners L.P. (HEP), a publicly-traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.
Segment profitability was $67.6 million, up from $54.9 million in fourth-quarter 2016. Earnings were buoyed by higher segment sales.
Balance Sheet
As of Dec 31, 2017, HollyFrontier had approximately $630.8 million in cash and cash equivalents, and $2,498.9 million in net long-term debt, representing a debt-to-capitalization ratio of 29.8%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to three lower.
VGM Scores
At this time, HFC has a nice Growth Score of B, though it is lagging a lot on the momentum front with an F. However, the stock was also allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, HFC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is HollyFrontier (HFC) Up 10.4% Since Its Last Earnings Report?
It has been about a month since the last earnings report for HollyFrontier Corporation . Shares have added about 10.4% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is HFC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Recent Earnings
HollyFrontier Corporation reported fourth-quarter 2017 net income per share (excluding special items) of 70 cents, below the Zacks Consensus Estimate of 82 cents. The weaker than expected results can be attributed to lower than expected refining margins. Notably, the refining margins in the quarter stood at $12.54 a barrel as against the Zacks Consensus Estimate of $13.15 a barrel.
However, the bottom line turned around from the year-ago period’s loss of 6 cents. Strong year-over-year results were driven by higher sales volume and stronger contribution across all segments.
Revenues of $3,992.7 million missed the Zacks Consensus Estimate of $4,310 million. However, the top line surged 35.1% from the fourth-quarter 2016 sales of $2,955.1 million.
Segmental Information
Refining: Net income from the Refining segment, which is the main contributor to HollyFrontier’s earnings, was $282.3 million, surging a whopping 475.5% from the year-ago income of $49 million. The improvement reflects wider gross margins, which jumped 85.2% to $12.54 per barrel.
Total refined product sales volume averaged 482,860 barrels per day (bpd), up 3.5% from 464,160 bpd in the year-ago quarter. Moreover, throughput increased from 497,450 bpd in the prior-year quarter to 466,640 bpd. Capacity utilization was 100.9%, up from 94.5% in fourth-quarter 2016.
Lubricants and Specialty Products: Income from the segment, totaled $29.3 million, up from $20.6 million reported in the year-ago quarter. Product sales averaged 29,670 bpd, significantly above the prior-year level of 11,230 bpd. Throughput came in at 20,990 bpd in the reported quarter.
HEP: This unit includes HollyFrontier’s 36% interest in Holly Energy Partners L.P. (HEP), a publicly-traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.
Segment profitability was $67.6 million, up from $54.9 million in fourth-quarter 2016. Earnings were buoyed by higher segment sales.
Balance Sheet
As of Dec 31, 2017, HollyFrontier had approximately $630.8 million in cash and cash equivalents, and $2,498.9 million in net long-term debt, representing a debt-to-capitalization ratio of 29.8%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to three lower.
HollyFrontier Corporation Price and Consensus
HollyFrontier Corporation Price and Consensus | HollyFrontier Corporation Quote
VGM Scores
At this time, HFC has a nice Growth Score of B, though it is lagging a lot on the momentum front with an F. However, the stock was also allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, HFC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.