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Marathon (MPC) Follows Refining Peers to Q4 Earnings Beat
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Independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Free Report) reported adjusted earnings of $1.30 per share, which comfortably beat the Zacks Consensus Estimate of 47 cents and improved from a loss of 94 cents per share in the year-ago period. The company’s bottom line was favourably impacted by stronger-than-expected performance from both segments. Precisely, operating income from the Refining & Marketing and the Midstream units totaled $881 million and $1.1 billion, respectively, ahead of their Zacks Consensus Estimate of $335 million and $995 million.
Marathon Petroleum reported revenues of $35.6 billion that beat the Zacks Consensus Estimate of $25.3 billion and improved 96% year over year.
The company repurchased shares worth $3 billion during the October-January period and has now completed around 55% of its target to buy back $10 billion in common stock. This was after Marathon Petroleum concluded the sale of its Speedway business comprising approximately 3,900 c-stores in 35 states to Japan-based retail group Seven &i Holdings — the owner of the 7-Eleven convenience store chain — for $21 billion. Further planning to reward its shareholders, MPC announced a new $5 billion buyback program.
Marathon Petroleum Corporation Price, Consensus and EPS Surprise
With the current conditions auguring well for the refining stocks, MPC follows peers Valero Energy (VLO - Free Report) and Phillips 66 (PSX - Free Report) in benefiting from favorable margins.
Phillips 66 reported fourth-quarter 2021 adjusted earnings per share of $2.94, beating the Zacks Consensus Estimate of $1.93. The bottom line also turned around from a loss of $1.16 in the year-ago quarter.
PSX’s margins improved to $11.60 per barrel from the year-ago quarter’s $2.18. The same in the Central Corridor and Atlantic Basin/Europe increased to $12.60 and $11.00 per barrel from the year-ago level of $4.27 and $2.99, respectively. In the Gulf Coast, the metric registered an improvement to $9.19 per barrel from a loss of 78 cents in the prior-year quarter. The West Coast witnessed an increase in margins from $1.79 per barrel in the year-ago quarter to $15.41 for the December quarter of 2021.
Another refining giant Valero Energy reported fourth-quarter 2021 adjusted earnings of $2.47 per share, improving from a loss of $1.06 in the year-ago quarter. The bottom line also beat the Zacks Consensus Estimate of $1.79 per share. VLO’s strong quarterly results were supported by increased refinery throughput volumes and a higher refining margin.
For the quarter, refining throughput volumes were 3,033 thousand barrels per day (MBbls/d), up from 2,550 MBbls/d in third-quarter 2020. Meanwhile, Valero Energy’s refining margin per barrel of throughput increased to $10.73 from the year-ago level of $4.64.
Inside MPC’s Segments
Refining & Marketing: The Refining & Marketing segment reported operating income of $881 million, turning around from the year-ago loss of $1.6 billion. The improvement primarily reflects higher y/y margins and throughputs.
Specifically, refining margin of $15.88 per barrel more than doubled from $7.42 a year ago. Total refined product sales volumes were 3,600 thousand barrels per day (mbpd), up from the 3,223 mbpd in the year-ago quarter. Throughput rose from 2,528 mbpd in the year-ago quarter to 2,936 mbpd and it beat the Zacks Consensus Estimate of 2,872 mbpd. Capacity utilization during the quarter was up from last year’s 82% to 94%.
Midstream: This unit mainly reflects Marathon Petroleum’s general partner and majority limited partner interests in MPLX LP (MPLX - Free Report) – a publicly traded master limited partnerships that own, operate, develop and acquire pipelines and other midstream assets.
Segment profitability was $1.1 billion, 10% higher than the fourth quarter of 2020. Earnings were supported by stable, fee-based revenues from MPLX’s wide range of midstream energy services.
Costs, Capex & Balance Sheet
Marathon Petroleum, carrying a Zacks Rank #3 (Hold), reported expenses of $33.8 billion in fourth-quarter 2021, surging 90% from the year-ago quarter.
In the reported quarter, Marathon Petroleum spent $651 million on capital programs (57% on Refining & Marketing and 35% on the Midstream segment) compared to $491 million in the year-ago period. As of Dec 31, the company had cash and cash equivalents of $5.3 billion and a total debt, including that of MPLX, of $25.5 billion, with a debt-to-capitalization of 43.9%.
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Marathon (MPC) Follows Refining Peers to Q4 Earnings Beat
Independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Free Report) reported adjusted earnings of $1.30 per share, which comfortably beat the Zacks Consensus Estimate of 47 cents and improved from a loss of 94 cents per share in the year-ago period. The company’s bottom line was favourably impacted by stronger-than-expected performance from both segments. Precisely, operating income from the Refining & Marketing and the Midstream units totaled $881 million and $1.1 billion, respectively, ahead of their Zacks Consensus Estimate of $335 million and $995 million.
Marathon Petroleum reported revenues of $35.6 billion that beat the Zacks Consensus Estimate of $25.3 billion and improved 96% year over year.
The company repurchased shares worth $3 billion during the October-January period and has now completed around 55% of its target to buy back $10 billion in common stock. This was after Marathon Petroleum concluded the sale of its Speedway business comprising approximately 3,900 c-stores in 35 states to Japan-based retail group Seven &i Holdings — the owner of the 7-Eleven convenience store chain — for $21 billion. Further planning to reward its shareholders, MPC announced a new $5 billion buyback program.
Marathon Petroleum Corporation Price, Consensus and EPS Surprise
Marathon Petroleum Corporation price-consensus-eps-surprise-chart | Marathon Petroleum Corporation Quote
Refining Earnings Update
With the current conditions auguring well for the refining stocks, MPC follows peers Valero Energy (VLO - Free Report) and Phillips 66 (PSX - Free Report) in benefiting from favorable margins.
Phillips 66 reported fourth-quarter 2021 adjusted earnings per share of $2.94, beating the Zacks Consensus Estimate of $1.93. The bottom line also turned around from a loss of $1.16 in the year-ago quarter.
PSX’s margins improved to $11.60 per barrel from the year-ago quarter’s $2.18. The same in the Central Corridor and Atlantic Basin/Europe increased to $12.60 and $11.00 per barrel from the year-ago level of $4.27 and $2.99, respectively. In the Gulf Coast, the metric registered an improvement to $9.19 per barrel from a loss of 78 cents in the prior-year quarter. The West Coast witnessed an increase in margins from $1.79 per barrel in the year-ago quarter to $15.41 for the December quarter of 2021.
Another refining giant Valero Energy reported fourth-quarter 2021 adjusted earnings of $2.47 per share, improving from a loss of $1.06 in the year-ago quarter. The bottom line also beat the Zacks Consensus Estimate of $1.79 per share. VLO’s strong quarterly results were supported by increased refinery throughput volumes and a higher refining margin.
For the quarter, refining throughput volumes were 3,033 thousand barrels per day (MBbls/d), up from 2,550 MBbls/d in third-quarter 2020. Meanwhile, Valero Energy’s refining margin per barrel of throughput increased to $10.73 from the year-ago level of $4.64.
Inside MPC’s Segments
Refining & Marketing: The Refining & Marketing segment reported operating income of $881 million, turning around from the year-ago loss of $1.6 billion. The improvement primarily reflects higher y/y margins and throughputs.
Specifically, refining margin of $15.88 per barrel more than doubled from $7.42 a year ago. Total refined product sales volumes were 3,600 thousand barrels per day (mbpd), up from the 3,223 mbpd in the year-ago quarter. Throughput rose from 2,528 mbpd in the year-ago quarter to 2,936 mbpd and it beat the Zacks Consensus Estimate of 2,872 mbpd. Capacity utilization during the quarter was up from last year’s 82% to 94%.
Midstream: This unit mainly reflects Marathon Petroleum’s general partner and majority limited partner interests in MPLX LP (MPLX - Free Report) – a publicly traded master limited partnerships that own, operate, develop and acquire pipelines and other midstream assets.
Segment profitability was $1.1 billion, 10% higher than the fourth quarter of 2020. Earnings were supported by stable, fee-based revenues from MPLX’s wide range of midstream energy services.
Costs, Capex & Balance Sheet
Marathon Petroleum, carrying a Zacks Rank #3 (Hold), reported expenses of $33.8 billion in fourth-quarter 2021, surging 90% from the year-ago quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
In the reported quarter, Marathon Petroleum spent $651 million on capital programs (57% on Refining & Marketing and 35% on the Midstream segment) compared to $491 million in the year-ago period. As of Dec 31, the company had cash and cash equivalents of $5.3 billion and a total debt, including that of MPLX, of $25.5 billion, with a debt-to-capitalization of 43.9%.