Shares of Delek US Holdings, Inc.’s (DK - Free Report) have dropped 12.2% since the company’s second-quarter 2021 earnings announcement on Aug 3.
This downward stock movement could possibly be triggered by a wider year-over-year loss reported for the second quarter, increase in operating expenses and a lack of contribution from the company’s refining segment.
Behind the Earnings Headlines
Delek’s second-quarter 2021 results recently reported an adjusted loss of 88 cents a share, narrower than the Zacks Consensus Estimate of a loss of $1.01, attributable to a strong contribution from its logistics segment. However, the loss was wider than the year-ago quarterly loss of 48 cents. This underperformance was due to weak contribution from the refining segment and an escalated operating expense.
Quarterly revenues of $2.19 billion compared favorably with the year-ago sales of $1.54 billion and also surpassed the Zacks Consensus Estimate of $1.96 billion.
Segmental Performances
Refining: The company reported a negative margin of $19.9 million for this segment against the positive $59.7 million in the year-ago quarter. However, adjusted margins of -$5 million narrowed from -$126.6 million in the year-ago period. Results improved from increased crack spreads as the rising frequency of vaccination and a worldwide economic recovery buoyed demand.
Logistics: This unit represents the company’s majority interest in Delek Logistics Partners, L.P. (DKL), a publicly-traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets. Margin from the Logistics unit was $64.2 million, up 4.6% from $61.4 million in the year-ago period, led by higher refinery utilization as well as demand along with divesting Trucking Assets.
Retail: Margin for the unit, which was formed from the acquisition of Alon USA Energy in 2017, fell 9.9% to $21.9 million from the year-earlier quarter’s level of $24.3 million on lower Retail fuel margin. Delek’s merchandise sales of $84.5 million with a margin of 32.7%, on average, compared unfavorably with $89.4 million sales carrying a margin of 30.8%, on average, in the prior year.
Its retail fuel gallons sale totaled $43 million in the June quarter of 2021, the average margin being 39 cents per gallon. This compared favorably with $42.4 million sale, the average margin being 45 cents per gallon in second-quarter 2020.
Financials
Total operating expenses incurred in the quarter increased 50.5% from the prior-year period to $2,276.9 million.
In the reported quarter, Delek spent $65.7 million on capital programs (92.4% on the Refining segment). As of Jun 30, 2021, the company had cash and cash equivalents worth $833 million and a long-term debt of $2,197.9 million with the total debt to total capital of 69.8%.
Guidance
Delek projects third-quarter 2021 total operating expenses in the 145-$155 million band while total crude throughput is estimated in the 280,000-290,000 barrels per day range.
The company anticipates its 2021 capital expenses to be around $175-$185 million, comprising turnarounds.
Zacks Rank & Key Picks
Delek currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy space are Matador Resources Co. (MTDR - Free Report) , Devon Energy Corp. (DVN - Free Report) and Continental Resources, Inc. , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Shares of Delek US Holdings, Inc.’s (DK - Free Report) have dropped 12.2% since the company’s second-quarter 2021 earnings announcement on Aug 3.
This downward stock movement could possibly be triggered by a wider year-over-year loss reported for the second quarter, increase in operating expenses and a lack of contribution from the company’s refining segment.
Behind the Earnings Headlines
Delek’s second-quarter 2021 results recently reported an adjusted loss of 88 cents a share, narrower than the Zacks Consensus Estimate of a loss of $1.01, attributable to a strong contribution from its logistics segment. However, the loss was wider than the year-ago quarterly loss of 48 cents. This underperformance was due to weak contribution from the refining segment and an escalated operating expense.
Quarterly revenues of $2.19 billion compared favorably with the year-ago sales of $1.54 billion and also surpassed the Zacks Consensus Estimate of $1.96 billion.
Segmental Performances
Refining: The company reported a negative margin of $19.9 million for this segment against the positive $59.7 million in the year-ago quarter. However, adjusted margins of -$5 million narrowed from -$126.6 million in the year-ago period. Results improved from increased crack spreads as the rising frequency of vaccination and a worldwide economic recovery buoyed demand.
Logistics: This unit represents the company’s majority interest in Delek Logistics Partners, L.P. (DKL), a publicly-traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets. Margin from the Logistics unit was $64.2 million, up 4.6% from $61.4 million in the year-ago period, led by higher refinery utilization as well as demand along with divesting Trucking Assets.
Retail: Margin for the unit, which was formed from the acquisition of Alon USA Energy in 2017, fell 9.9% to $21.9 million from the year-earlier quarter’s level of $24.3 million on lower Retail fuel margin. Delek’s merchandise sales of $84.5 million with a margin of 32.7%, on average, compared unfavorably with $89.4 million sales carrying a margin of 30.8%, on average, in the prior year.
Its retail fuel gallons sale totaled $43 million in the June quarter of 2021, the average margin being 39 cents per gallon. This compared favorably with $42.4 million sale, the average margin being 45 cents per gallon in second-quarter 2020.
Financials
Total operating expenses incurred in the quarter increased 50.5% from the prior-year period to $2,276.9 million.
In the reported quarter, Delek spent $65.7 million on capital programs (92.4% on the Refining segment). As of Jun 30, 2021, the company had cash and cash equivalents worth $833 million and a long-term debt of $2,197.9 million with the total debt to total capital of 69.8%.
Guidance
Delek projects third-quarter 2021 total operating expenses in the 145-$155 million band while total crude throughput is estimated in the 280,000-290,000 barrels per day range.
The company anticipates its 2021 capital expenses to be around $175-$185 million, comprising turnarounds.
Zacks Rank & Key Picks
Delek currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy space are Matador Resources Co. (MTDR - Free Report) , Devon Energy Corp. (DVN - Free Report) and Continental Resources, Inc. , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Highest Returns for Any Asset Class
It’s not even close. Despite ups and downs, Bitcoin has been more profitable for investors than any other decentralized, borderless form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.
Hurry, Download Special Report – It’s FREE >>
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