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Marathon Petroleum (MPC) Beats on Q4 Earnings, Revenues

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Ohio-based independent oil refiner and marketer, Marathon Petroleum Corp. (MPC - Free Report) reported strong fourth-quarter results, owing to higher product price realization and increased contribution from the Speedway segment.

The company reported earnings per share of $2.86, which surpassed the Zacks Consensus Estimate of $1.47.The bottom line also improved from the year-ago period adjusted profit of $2.10.


Quarterly revenues of $22,343 million also beat the Zacks Consensus Estimate of $18,918 million. The top line, however, fell from the year-ago figure of $24,932 million.

For the year ended Dec 31, 2014, Marathon reported per share adjusted profits of $8.78, above the Zacks Consensus Estimate of $7.55. The figure also improved from the 2013 earnings of $6.64 per share.

Revenues of $98.1 billion were ahead of the Zacks Consensus Estimate of $97.6 billion but fell 2.1% below the prior-year level.  

Segmental Performance

Refining & Marketing: The unit earned $1,016 million in the reported quarter compared with profits of $971 million a year ago. Higher realization of product prices led to the improvement but was partially marred by lower crack spread.

Total refined product sales volumes were 2,275 thousand barrels per day compared with 2,155 thousand barrels per day in the year-ago quarter. Throughput improved from 1,794 thousand barrels per day in the year-ago quarter to 1,860 thousand barrels per day.

Speedway: Income from the Speedway retail stations totaled $273 million, significantly higher than $83 million in the year-ago period. Improved margins from light products and merchandise, in addition to contribution from the Hess Corp. (HES - Free Report) acquisition aided the results.

Pipeline Transportation: Segment profitability was $58 million, up from $47 million in the fourth quarter of 2013. Earnings were propped up by higher transportation revenues and improved equity affiliate earnings. However, it was partially offset by increased operating expenses.

Total Expenses

Marathon Petroleum reported expenses of $21.1 billion in fourth-quarter 2014, lower than $23.9 billion in the year-ago quarter.

Capital Expenditure, Balance Sheet & Share Repurchase

In the reported quarter, Marathon Petroleum spent $726 million on capital programs (51.4% on Refining & Marketing segment). As of Dec 31, 2014, the company had cash and cash equivalents of 1,494 million and total debt of $6,637 million, with a debt-to-capitalization ratio of 37%.
 
Marathon Petroleum returned $820 million in the fourth quarter and $2.7 billion in full-year 2014 to shareholders through dividends and share repurchase programs.

Guidance 2015

Marathon Petroleum announced plans of investing $2.53 billion in 2015. A major portion of the capex – $1.28 billion – will be directed toward its Refining and Marketing segment. For its Speedway and Pipeline Transportation segments it projects investment of $452 million and $659 million respectively.

Strategic Update

Marathon Petroleum announced that it has completed the third-dropdown to MPLX LP (MPLX - Free Report) in a move to accelerate growth at the company.

Zacks Rank

Marathon Petroleum currently carries a Zacks Rank #3 (Hold).

A better-ranked player from the industry, Tesoro Corporation , carries a Zacks Rank #2 (Buy).




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