U.S. refiner HollyFrontier Corp. reported second-quarter 2019 net income per share (excluding special items) of $2.18, beating the Zacks Consensus Estimate of $1.67 and the year-ago adjusted profit of $1.45. The robust performance stemmed from stronger refining margins.
Revenues of $4.8 billion surpassed the Zacks Consensus Estimate of $4.6 billion and rose 7% from the second-quarter 2018 sales of $4.5 billion.
Segmental Information
Refining: Adjusted EBITDA from the Refining segment, which is the main contributor to HollyFrontier’s earnings, was $556.1 million. This reflected a 44.5% increase from the year-ago quarter’s income of $384.8 million, thanks to wider gross margins, which was up 18.5% to $19.64 per barrel.
Total refined product sales volumes averaged 469,100 barrels per day (bpd), up 3.4% from 453,830 bpd in the year-ago quarter. However, throughput decreased from 490,200 bpd in the year-ago quarter to 484,890 bpd. Meanwhile, capacity utilization was 99.1%, down from 101.4% in second-quarter 2018.
Lubricants and Specialty Products: The segment EBITDA totaled $28.8 million, lower than $39.4 million reported in the year-ago quarter on base oil market weakness. Product sales averaged 34,660 bpd, increasing from the prior-year level of 31,000 bpd. However, throughput fell 8.7% year over year to 16,990 bpd in the reported quarter.
HEP: This unit includes HollyFrontier’s 57% 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 EBITDA was $88.6 million, up from $81.9 million in second-quarter 2018. Earnings were buoyed by strong crude gathering volumes.
Balance Sheet
As of Jun 30, HollyFrontier had approximately $914.6 million in cash and cash equivalents, and $2.4 billion in long-term debt, representing a debt-to-capitalization ratio of 27.1%.
During the quarter, the company paid $56.7 million in dividends and bought back shares worth $189.2 million.
Zacks Rank & Stock Picks
HollyFrontier holds a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are TC Energy Corporation (TRP - Free Report) , Enbridge Inc. (ENB - Free Report) and Cheniere Energy, Inc. (LNG - Free Report) . All the companies carry a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Canada-based TC Energy has an excellent track of outperforming estimates over the last four quarters at an average rate of 14.8%.
Enbridge, also headquartered in Canada, has an excellent track of outperforming/meeting estimates over the last four quarters at an average rate of 18.5%.
Cheniere Energy’s expected EPS growth rate for three to five years currently stands at 31.1%, comparing favorably with the industry’s growth rate of 14.3%.
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U.S. refiner HollyFrontier Corp. reported second-quarter 2019 net income per share (excluding special items) of $2.18, beating the Zacks Consensus Estimate of $1.67 and the year-ago adjusted profit of $1.45. The robust performance stemmed from stronger refining margins.
Revenues of $4.8 billion surpassed the Zacks Consensus Estimate of $4.6 billion and rose 7% from the second-quarter 2018 sales of $4.5 billion.
Segmental Information
Refining: Adjusted EBITDA from the Refining segment, which is the main contributor to HollyFrontier’s earnings, was $556.1 million. This reflected a 44.5% increase from the year-ago quarter’s income of $384.8 million, thanks to wider gross margins, which was up 18.5% to $19.64 per barrel.
Total refined product sales volumes averaged 469,100 barrels per day (bpd), up 3.4% from 453,830 bpd in the year-ago quarter. However, throughput decreased from 490,200 bpd in the year-ago quarter to 484,890 bpd. Meanwhile, capacity utilization was 99.1%, down from 101.4% in second-quarter 2018.
Lubricants and Specialty Products: The segment EBITDA totaled $28.8 million, lower than $39.4 million reported in the year-ago quarter on base oil market weakness. Product sales averaged 34,660 bpd, increasing from the prior-year level of 31,000 bpd. However, throughput fell 8.7% year over year to 16,990 bpd in the reported quarter.
HEP: This unit includes HollyFrontier’s 57% 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 EBITDA was $88.6 million, up from $81.9 million in second-quarter 2018. Earnings were buoyed by strong crude gathering volumes.
Balance Sheet
As of Jun 30, HollyFrontier had approximately $914.6 million in cash and cash equivalents, and $2.4 billion in long-term debt, representing a debt-to-capitalization ratio of 27.1%.
During the quarter, the company paid $56.7 million in dividends and bought back shares worth $189.2 million.
Zacks Rank & Stock Picks
HollyFrontier holds a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are TC Energy Corporation (TRP - Free Report) , Enbridge Inc. (ENB - Free Report) and Cheniere Energy, Inc. (LNG - Free Report) . All the companies carry a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Canada-based TC Energy has an excellent track of outperforming estimates over the last four quarters at an average rate of 14.8%.
Enbridge, also headquartered in Canada, has an excellent track of outperforming/meeting estimates over the last four quarters at an average rate of 18.5%.
Cheniere Energy’s expected EPS growth rate for three to five years currently stands at 31.1%, comparing favorably with the industry’s growth rate of 14.3%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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