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Why Is Marathon Petroleum (MPC) Up 0.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for Marathon Petroleum (MPC - Free Report) . Shares have added about 0.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Marathon Petroleum due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Independent oil refiner and marketer Marathon Petroleum 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.
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 – 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 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%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 204.8% due to these changes.
VGM Scores
Currently, Marathon Petroleum has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Marathon Petroleum has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Marathon Petroleum (MPC) Up 0.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Marathon Petroleum (MPC - Free Report) . Shares have added about 0.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Marathon Petroleum due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Marathon Petroleum Posts Better-Than-Expected Q4 Earnings
Independent oil refiner and marketer Marathon Petroleum 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.
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 – 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 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%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 204.8% due to these changes.
VGM Scores
Currently, Marathon Petroleum has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Marathon Petroleum has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.