Independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Free Report) reported adjusted earnings per share of $5.32, which comfortably beat the Zacks Consensus Estimate of $4.55 on the back of lower costs and expenses.
However, the company’s bottom line fell from the year-ago adjusted profit of $10.61 due to weaker-than-expected performance of its key Refining & Marketing segment. Operating income of the segment totaled $2.3 billion, below our projection of $2.8 billion.
Marathon Petroleum reported revenues of $36.8 billion, which beat the Zacks Consensus Estimate of $31 billion but declined 32.1% year over year.
Financial Analysis
Marathon Petroleum, carrying a Zacks Rank #3 (Hold), reported expenses of $33.5 billion in second-quarter 2023, falling 27% from the year-ago quarter but coming above our projection of $24.5 billion.
You can see the complete list of today’s Zacks #1 Rank stocks here.
In the reported quarter, Marathon Petroleum spent $562 million on capital programs (43% on Refining & Marketing and 48% on the Midstream segment) compared to $577 million in the year-ago period. As of Jun 30, the company had cash and cash equivalents of $7.3 billion and total debt, including that of MPLX, of $27.3 billion, with a debt-to-capitalization of 46.3%.
In the second quarter, MPC repurchased $3.1 billion of shares and a further $800 million worth of shares in July. The company currently has a remaining authorization of $6.3 billion.
Some Key Refining Earnings
While we have discussed MPC’s second-quarter results in detail, let’s see how some other refining companies have fared this earnings season.
Phillips 66 (PSX - Free Report) reported adjusted earnings per share of $3.87, beating the Zacks Consensus Estimate of $3.54. The outperformance can be primarily attributed to lower expenses. The positives were partially offset by PSX’s declining refining margins worldwide.
For the reported quarter, Phillips 66 generated $955 million of net cash from operations, down from $1.8 billion a year ago. PSX’s capital expenditure and investments totaled $551 million. It paid out dividends of $474 million in the reported quarter. As of Jun 30, 2023, cash and cash equivalents were $3 billion. Meanwhile, Phillips 66 reported total debt of $19.9 billion, reflecting a consolidated debt to capitalization of 39%.
Another refining giant, Valero Energy (VLO - Free Report) , also reported better-than-expected second-quarter earnings. The EPS of $5.40 per share came in well above the Zacks Consensus Estimate of $5.08. This was on account of VLO’s increased renewable diesel sales volumes and a decline in total costs of sales.
At the end of the second quarter, VLO had cash and cash equivalents of $5.1 billion, while the company’s total debt and finance lease obligations amounted to $11.3 billion. Valero’s second-quarter capital investment was $458 million. Of the total, $382 million was allotted for sustaining the business.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Free Report) reported adjusted earnings per share of $5.32, which comfortably beat the Zacks Consensus Estimate of $4.55 on the back of lower costs and expenses.
However, the company’s bottom line fell from the year-ago adjusted profit of $10.61 due to weaker-than-expected performance of its key Refining & Marketing segment. Operating income of the segment totaled $2.3 billion, below our projection of $2.8 billion.
Marathon Petroleum reported revenues of $36.8 billion, which beat the Zacks Consensus Estimate of $31 billion but declined 32.1% year over year.
Financial Analysis
Marathon Petroleum, carrying a Zacks Rank #3 (Hold), reported expenses of $33.5 billion in second-quarter 2023, falling 27% from the year-ago quarter but coming above our projection of $24.5 billion.
You can see the complete list of today’s Zacks #1 Rank stocks here.
In the reported quarter, Marathon Petroleum spent $562 million on capital programs (43% on Refining & Marketing and 48% on the Midstream segment) compared to $577 million in the year-ago period. As of Jun 30, the company had cash and cash equivalents of $7.3 billion and total debt, including that of MPLX, of $27.3 billion, with a debt-to-capitalization of 46.3%.
In the second quarter, MPC repurchased $3.1 billion of shares and a further $800 million worth of shares in July. The company currently has a remaining authorization of $6.3 billion.
Some Key Refining Earnings
While we have discussed MPC’s second-quarter results in detail, let’s see how some other refining companies have fared this earnings season.
Phillips 66 (PSX - Free Report) reported adjusted earnings per share of $3.87, beating the Zacks Consensus Estimate of $3.54. The outperformance can be primarily attributed to lower expenses. The positives were partially offset by PSX’s declining refining margins worldwide.
For the reported quarter, Phillips 66 generated $955 million of net cash from operations, down from $1.8 billion a year ago. PSX’s capital expenditure and investments totaled $551 million. It paid out dividends of $474 million in the reported quarter. As of Jun 30, 2023, cash and cash equivalents were $3 billion. Meanwhile, Phillips 66 reported total debt of $19.9 billion, reflecting a consolidated debt to capitalization of 39%.
Another refining giant, Valero Energy (VLO - Free Report) , also reported better-than-expected second-quarter earnings. The EPS of $5.40 per share came in well above the Zacks Consensus Estimate of $5.08. This was on account of VLO’s increased renewable diesel sales volumes and a decline in total costs of sales.
At the end of the second quarter, VLO had cash and cash equivalents of $5.1 billion, while the company’s total debt and finance lease obligations amounted to $11.3 billion. Valero’s second-quarter capital investment was $458 million. Of the total, $382 million was allotted for sustaining the business.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Zacks Reveals ChatGPT "Sleeper" Stock
One little-known company is at the heart of an especially brilliant Artificial Intelligence sector. By 2030, the AI industry is predicted to have an internet and iPhone-scale economic impact of $15.7 Trillion.
As a service to readers, Zacks is providing a bonus report that names and explains this explosive growth stock and 4 other "must buys." Plus more.
Download Free ChatGPT Stock Report Right Now >>
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