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Why Is PBF Energy (PBF) Up 88.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for PBF Energy (PBF - Free Report) . Shares have added about 88.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PBF Energy 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 drivers.
PBF Energy Posts Huge Q4 Loss on Weak Refining Margin
PBF Energyreported fourth-quarter 2020 loss of $4.53 per share, wider than the Zacks Consensus Estimate of a loss of $3.41. The company reported earnings of 60 cents per share in the year-ago quarter.
The weak quarterly earnings can be attributed to lower crude oil and feedstock throughput volumes, significantly reduced gross refining margin, as well as increased refinery operating expense.
Total revenues decreased to $3,655.1 million from $6,301.5 million in the prior-year quarter. However, the top line beat the Zacks Consensus Estimate of $3,522 million.
Energy demand destruction caused by coronavirus-induced lockdowns and travel bans massively affected refining and marketing companies’ 2020 bottom line.
The pandemic forced PBF Energy to reduce refinery rates in second-half 2020. Importantly, its refineries are expected to run at reduced utilization rates until demand is adequate. Near-term throughput volumes will likely be in the range of 675-725 thousand barrels per day (bpd).
Looking forward, the company’s East Coast refining reconfiguration and other favorable moves are expected to lead to $200-$225 million of cost savings per annum. Its refining capital expenditure for the first half of 2021 is now expected to be $150 million.
Segmental Performance
The company’s operating loss at the Refining segment was $311.6 million against profit of $184.9 million a year ago.
It generated a profit of $41.9 million from the Logistics segment, which reflects a decrease from the prior-year quarter’s $42.9 million.
Throughput Analysis
Volumes:
For the quarter under review, crude oil and feedstocks throughput volumes were 677.3 thousand bpd, lower than the year-ago figure of 843 thousand bpd.
East Coast, Mid-Continent, Gulf Coast and West Coast regions accounted for 33.8%, 16.5%, 17.5%, and 32.2%, respectively, of total oil and feedstock throughput volume.
Margins:
Company-wide gross refining margin per barrel of throughput — excluding special items — was recorded at 98 cents, significantly lower than the year-earlier quarter’s $9.31.
Refining margin per barrel of throughput was 9 cents in the East Coast, down from $8.16 in the year-earlier quarter. Realized refining loss was $1.64 per barrel in the Gulf Coast against a profit of $6.05 in the prior-year period. Moreover, the metric was $2.72 and $2.17 per barrel in the West Coast and Mid-Continent, down from $14.85 and $9.42, respectively, a year ago.
Refinery operating expense per barrel of throughput was $7.25, higher than $5.28 in the year-ago quarter.
Costs & Expenses
Total costs and expenses for the reported quarter were $3,983.2 million, significantly lower than $6,178.5 million in the year-ago period. Cost of sales — which includes operating expenses, cost of products and others — amounted to $3,835.6 million, lower than the year-ago level of $6,066.3 million. General and administrative expenses fell to $61.5 million from $108.1 million in the year-ago period.
Capital Expenditure & Balance Sheet
Through the fourth quarter, the company spent $45.7 million capital on refining operations and $2.7 million on logistics businesses.
At quarter-end, it had cash and cash equivalents of $1,609.5 million, up from the third-quarter level of $1,282.6 million. As of Dec 31, PBF Energy had a total debt of $4,661 million, up from the third-quarter level of $4,411.1 million. This resulted in total debt to capitalization of 68%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 6.69% due to these changes.
VGM Scores
Currently, PBF Energy has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, PBF Energy 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 PBF Energy (PBF) Up 88.7% Since Last Earnings Report?
A month has gone by since the last earnings report for PBF Energy (PBF - Free Report) . Shares have added about 88.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PBF Energy 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 drivers.
PBF Energy Posts Huge Q4 Loss on Weak Refining Margin
PBF Energyreported fourth-quarter 2020 loss of $4.53 per share, wider than the Zacks Consensus Estimate of a loss of $3.41. The company reported earnings of 60 cents per share in the year-ago quarter.
The weak quarterly earnings can be attributed to lower crude oil and feedstock throughput volumes, significantly reduced gross refining margin, as well as increased refinery operating expense.
Total revenues decreased to $3,655.1 million from $6,301.5 million in the prior-year quarter. However, the top line beat the Zacks Consensus Estimate of $3,522 million.
Energy demand destruction caused by coronavirus-induced lockdowns and travel bans massively affected refining and marketing companies’ 2020 bottom line.
The pandemic forced PBF Energy to reduce refinery rates in second-half 2020. Importantly, its refineries are expected to run at reduced utilization rates until demand is adequate. Near-term throughput volumes will likely be in the range of 675-725 thousand barrels per day (bpd).
Looking forward, the company’s East Coast refining reconfiguration and other favorable moves are expected to lead to $200-$225 million of cost savings per annum. Its refining capital expenditure for the first half of 2021 is now expected to be $150 million.
Segmental Performance
The company’s operating loss at the Refining segment was $311.6 million against profit of $184.9 million a year ago.
It generated a profit of $41.9 million from the Logistics segment, which reflects a decrease from the prior-year quarter’s $42.9 million.
Throughput Analysis
Volumes:
For the quarter under review, crude oil and feedstocks throughput volumes were 677.3 thousand bpd, lower than the year-ago figure of 843 thousand bpd.
East Coast, Mid-Continent, Gulf Coast and West Coast regions accounted for 33.8%, 16.5%, 17.5%, and 32.2%, respectively, of total oil and feedstock throughput volume.
Margins:
Company-wide gross refining margin per barrel of throughput — excluding special items — was recorded at 98 cents, significantly lower than the year-earlier quarter’s $9.31.
Refining margin per barrel of throughput was 9 cents in the East Coast, down from $8.16 in the year-earlier quarter. Realized refining loss was $1.64 per barrel in the Gulf Coast against a profit of $6.05 in the prior-year period. Moreover, the metric was $2.72 and $2.17 per barrel in the West Coast and Mid-Continent, down from $14.85 and $9.42, respectively, a year ago.
Refinery operating expense per barrel of throughput was $7.25, higher than $5.28 in the year-ago quarter.
Costs & Expenses
Total costs and expenses for the reported quarter were $3,983.2 million, significantly lower than $6,178.5 million in the year-ago period. Cost of sales — which includes operating expenses, cost of products and others — amounted to $3,835.6 million, lower than the year-ago level of $6,066.3 million. General and administrative expenses fell to $61.5 million from $108.1 million in the year-ago period.
Capital Expenditure & Balance Sheet
Through the fourth quarter, the company spent $45.7 million capital on refining operations and $2.7 million on logistics businesses.
At quarter-end, it had cash and cash equivalents of $1,609.5 million, up from the third-quarter level of $1,282.6 million. As of Dec 31, PBF Energy had a total debt of $4,661 million, up from the third-quarter level of $4,411.1 million. This resulted in total debt to capitalization of 68%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 6.69% due to these changes.
VGM Scores
Currently, PBF Energy has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, PBF Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.