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Marathon (MPC) Q1 Earnings Beat on Surging Refining Margins
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Independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Free Report) reported earnings per share of $1.49, which comfortably beat the Zacks Consensus Estimate of $1.12 and compared with a loss of 37 cents per share in the year-ago period. The company’s bottom line was favorably impacted by the stronger-than-expected performance of both segments. Precisely, operating income from the Refining & Marketing and the Midstream units totaled $768 million and $1.1 billion, respectively, ahead of their Zacks Consensus Estimates by 43.2% and 1.6%.
Marathon Petroleum reported revenues of $38.4 billion that beat the Zacks Consensus Estimate of $27.9 billion and improved 67.7% year over year.
The company repurchased shares worth $2.5 billion during the February-April period and has now completed around 80% 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.
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 adjusted earnings per share of $1.32, comfortably beating the Zacks Consensus Estimate of $1.14. The bottom line also turned around from a loss of $1.16 per share in the year-ago quarter.
PSX’s margins improved to $10.55 per barrel from the year-ago quarter’s $4.36. The same in the Central Corridor and Atlantic Basin/Europe increased to $7.89 and $11.71 per barrel from the year-ago levels of $5.97 and $4.86, respectively. In the Gulf Coast, the metric registered an improvement to $7.71 per barrel from $3.39 in the prior-year quarter. The West Coast witnessed an increase in margins from $3.33 per barrel in the year-ago quarter to $17.68 in the March-end quarter of 2022.
Another refining giant Valero Energy reported adjusted earnings of $2.31 per share, improving from a loss of $1.73 in the year-ago quarter. The bottom line also beat the Zacks Consensus Estimate of $1.61 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 2,800 thousand barrels per day (MBbls/d), up from 2,410 MBbls/d in first-quarter 2021. Meanwhile, Valero Energy’s refining margin per barrel of throughput increased to $12.74 from the year-ago level of $6.91.
Inside MPC’s Segments
Refining & Marketing: The Refining & Marketing segment reported operating income of $768 million, turning around from the year-ago loss of $598 million. The improvement primarily reflects higher year-over-year margins and throughputs.
Specifically, refining margin of $15.31 per barrel improved significantly from $10.16 a year ago. Total refined product sales volumes were 3,293 thousand barrels per day (mbpd), up from the 3,067 mbpd in the year-ago quarter. Throughput rose from 2,565 mbpd in the year-ago quarter to 2,833 mbpd but missed the Zacks Consensus Estimate of 2,846 mbpd. Capacity utilization during the quarter was up from last year’s 83% to 91%.
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, 10.3% higher than the first quarter of 2021. 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 #2 (Buy), reported expenses of $36.7 billion in first-quarter 2022, rising 61.8% from the year-ago quarter.
In the reported quarter, Marathon Petroleum spent $573 million on capital programs (43% on Refining & Marketing and 49% on the Midstream segment) compared to $410 million in the year-ago period. As of Mar 31, the company had cash and cash equivalents of $7.1 billion and total debt, including that of MPLX, of $26.7 billion, with a debt-to-capitalization of 46.8%.
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Marathon (MPC) Q1 Earnings Beat on Surging Refining Margins
Independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Free Report) reported earnings per share of $1.49, which comfortably beat the Zacks Consensus Estimate of $1.12 and compared with a loss of 37 cents per share in the year-ago period. The company’s bottom line was favorably impacted by the stronger-than-expected performance of both segments. Precisely, operating income from the Refining & Marketing and the Midstream units totaled $768 million and $1.1 billion, respectively, ahead of their Zacks Consensus Estimates by 43.2% and 1.6%.
Marathon Petroleum reported revenues of $38.4 billion that beat the Zacks Consensus Estimate of $27.9 billion and improved 67.7% year over year.
The company repurchased shares worth $2.5 billion during the February-April period and has now completed around 80% 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.
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 adjusted earnings per share of $1.32, comfortably beating the Zacks Consensus Estimate of $1.14. The bottom line also turned around from a loss of $1.16 per share in the year-ago quarter.
PSX’s margins improved to $10.55 per barrel from the year-ago quarter’s $4.36. The same in the Central Corridor and Atlantic Basin/Europe increased to $7.89 and $11.71 per barrel from the year-ago levels of $5.97 and $4.86, respectively. In the Gulf Coast, the metric registered an improvement to $7.71 per barrel from $3.39 in the prior-year quarter. The West Coast witnessed an increase in margins from $3.33 per barrel in the year-ago quarter to $17.68 in the March-end quarter of 2022.
Another refining giant Valero Energy reported adjusted earnings of $2.31 per share, improving from a loss of $1.73 in the year-ago quarter. The bottom line also beat the Zacks Consensus Estimate of $1.61 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 2,800 thousand barrels per day (MBbls/d), up from 2,410 MBbls/d in first-quarter 2021. Meanwhile, Valero Energy’s refining margin per barrel of throughput increased to $12.74 from the year-ago level of $6.91.
Inside MPC’s Segments
Refining & Marketing: The Refining & Marketing segment reported operating income of $768 million, turning around from the year-ago loss of $598 million. The improvement primarily reflects higher year-over-year margins and throughputs.
Specifically, refining margin of $15.31 per barrel improved significantly from $10.16 a year ago. Total refined product sales volumes were 3,293 thousand barrels per day (mbpd), up from the 3,067 mbpd in the year-ago quarter. Throughput rose from 2,565 mbpd in the year-ago quarter to 2,833 mbpd but missed the Zacks Consensus Estimate of 2,846 mbpd. Capacity utilization during the quarter was up from last year’s 83% to 91%.
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, 10.3% higher than the first quarter of 2021. 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 #2 (Buy), reported expenses of $36.7 billion in first-quarter 2022, rising 61.8% 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 $573 million on capital programs (43% on Refining & Marketing and 49% on the Midstream segment) compared to $410 million in the year-ago period. As of Mar 31, the company had cash and cash equivalents of $7.1 billion and total debt, including that of MPLX, of $26.7 billion, with a debt-to-capitalization of 46.8%.