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Marathon (MPC) Stock Rises Since Q2 Earnings Beat: Here's Why
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The stock of independent oil refiner and marketer, Marathon Petroleum Corporation (MPC - Free Report) , has gained 7.9% since its second-quarter results were announced on Aug 2. The positive response could be attributed to the company’s comfortable earnings beat and its declaration of another round of buyback program.
What Did Marathon Petroleum’s Earnings Unveil?
Marathon Petroleum reported adjusted earnings per share of $10.61, which comfortably beat the Zacks Consensus Estimate of $9.17 and compared with a profit of merely 67 cents per share in the year-ago period.
The company’s bottom line was favorably impacted by the stronger-than-expected performance of its Refining & Marketing segment, whose operating income totaled $7.1 billion, ahead of its Zacks Consensus Estimate by 108.4%.
Marathon Petroleum reported revenues of $54.2 billion, which beat the Zacks Consensus Estimate of $33.3 billion and improved 81.8% year over year.
The company repurchased shares worth $4.1 billion during the May-July period and has now completed more than 80% of its target to buy back $15 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.
With the existing capital return program coming to a close, the MPC board authorized a new $5 billion repurchase scheme with no expiration date.
Marathon Petroleum Corporation Price, Consensus and EPS Surprise
Refining & Marketing: The Refining & Marketing segment reported an operating income of $7.1 billion, which soared from the year-ago profit of just $224 million. The jump primarily reflects higher year-over-year margins and throughputs.
Specifically, refining margin of $37.54 per barrel improved significantly from $12.45 a year ago. Total refined product sales volumes were 3,615 thousand barrels per day (mbpd), up from 3,489 mbpd in the year-ago quarter. Throughput rose from 2,854 mbpd in the year-ago quarter to 3,069 mbpd and beat the Zacks Consensus Estimate of 2,535 mbpd. Capacity utilization during the quarter was up from last year’s 94% to 100%.
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 partnership that owns, operates, develops and acquires pipelines and other midstream assets.
Segment profitability was $1.1 billion, 15.3% higher than the second 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 $45.9 billion in second-quarter 2022, rising 59.1% from the year-ago quarter.
In the reported quarter, Marathon Petroleum spent $577 million on capital programs (55% on Refining & Marketing and 38% on the Midstream segment) compared to $467 million in the year-ago period. As of Jun 30, the company had cash and cash equivalents of $9.1 billion and total debt, including that of MPLX, of $26.8 billion, with a debt-to-capitalization of 45%.
Some Key Refining Earnings
While we have discussed MPC’s second-quarter results in detail, let’s see how some other refining companies fared this earnings season.
Phillips 66 (PSX - Free Report) reported adjusted earnings per share of $6.77, comfortably beating the Zacks Consensus Estimate of $5.92. The bottom line also skyrocketed from a profit of 74 cents per share in the year-ago quarter.
PSX’s worldwide margins surged to $28.31 per barrel from the year-ago quarter’s $3.92. The same in the Central Corridor and Atlantic Basin/Europe increased to $26.72 and $30.39 per barrel from the year-ago levels of $6.40 and $4.63, respectively. In the Gulf Coast, Phillips 66 saw the metric jump to $24.80 per barrel from $2.10 in the prior-year quarter. The West Coast witnessed an increase in margins from $3.37 per barrel in the year-ago quarter to $33.13 in the June-end quarter of 2022.
Another refining giant Valero Energy (VLO - Free Report) reported adjusted earnings of $11.36 per share, compared to a meager 48 cents in the year-ago quarter. The bottom line also beat the Zacks Consensus Estimate of $9.70 per share. VLO’s strong quarterly results were supported by increased refinery throughput volumes and a higher refining margin.
For the quarter, Valero’s refining throughput volumes were 2,962 thousand barrels per day (MBbls/d), up from 2,835 MBbls/d in second-quarter 2021. Meanwhile, VLO’s refining margin per barrel of throughput increased to $30.01 from the year-ago level of $7.95.
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Marathon (MPC) Stock Rises Since Q2 Earnings Beat: Here's Why
The stock of independent oil refiner and marketer, Marathon Petroleum Corporation (MPC - Free Report) , has gained 7.9% since its second-quarter results were announced on Aug 2. The positive response could be attributed to the company’s comfortable earnings beat and its declaration of another round of buyback program.
What Did Marathon Petroleum’s Earnings Unveil?
Marathon Petroleum reported adjusted earnings per share of $10.61, which comfortably beat the Zacks Consensus Estimate of $9.17 and compared with a profit of merely 67 cents per share in the year-ago period.
The company’s bottom line was favorably impacted by the stronger-than-expected performance of its Refining & Marketing segment, whose operating income totaled $7.1 billion, ahead of its Zacks Consensus Estimate by 108.4%.
Marathon Petroleum reported revenues of $54.2 billion, which beat the Zacks Consensus Estimate of $33.3 billion and improved 81.8% year over year.
The company repurchased shares worth $4.1 billion during the May-July period and has now completed more than 80% of its target to buy back $15 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.
With the existing capital return program coming to a close, the MPC board authorized a new $5 billion repurchase scheme with no expiration date.
Marathon Petroleum Corporation Price, Consensus and EPS Surprise
Marathon Petroleum Corporation price-consensus-eps-surprise-chart | Marathon Petroleum Corporation Quote
Inside MPC’s Segments
Refining & Marketing: The Refining & Marketing segment reported an operating income of $7.1 billion, which soared from the year-ago profit of just $224 million. The jump primarily reflects higher year-over-year margins and throughputs.
Specifically, refining margin of $37.54 per barrel improved significantly from $12.45 a year ago. Total refined product sales volumes were 3,615 thousand barrels per day (mbpd), up from 3,489 mbpd in the year-ago quarter. Throughput rose from 2,854 mbpd in the year-ago quarter to 3,069 mbpd and beat the Zacks Consensus Estimate of 2,535 mbpd. Capacity utilization during the quarter was up from last year’s 94% to 100%.
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 partnership that owns, operates, develops and acquires pipelines and other midstream assets.
Segment profitability was $1.1 billion, 15.3% higher than the second 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 $45.9 billion in second-quarter 2022, rising 59.1% 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 $577 million on capital programs (55% on Refining & Marketing and 38% on the Midstream segment) compared to $467 million in the year-ago period. As of Jun 30, the company had cash and cash equivalents of $9.1 billion and total debt, including that of MPLX, of $26.8 billion, with a debt-to-capitalization of 45%.
Some Key Refining Earnings
While we have discussed MPC’s second-quarter results in detail, let’s see how some other refining companies fared this earnings season.
Phillips 66 (PSX - Free Report) reported adjusted earnings per share of $6.77, comfortably beating the Zacks Consensus Estimate of $5.92. The bottom line also skyrocketed from a profit of 74 cents per share in the year-ago quarter.
PSX’s worldwide margins surged to $28.31 per barrel from the year-ago quarter’s $3.92. The same in the Central Corridor and Atlantic Basin/Europe increased to $26.72 and $30.39 per barrel from the year-ago levels of $6.40 and $4.63, respectively. In the Gulf Coast, Phillips 66 saw the metric jump to $24.80 per barrel from $2.10 in the prior-year quarter. The West Coast witnessed an increase in margins from $3.37 per barrel in the year-ago quarter to $33.13 in the June-end quarter of 2022.
Another refining giant Valero Energy (VLO - Free Report) reported adjusted earnings of $11.36 per share, compared to a meager 48 cents in the year-ago quarter. The bottom line also beat the Zacks Consensus Estimate of $9.70 per share. VLO’s strong quarterly results were supported by increased refinery throughput volumes and a higher refining margin.
For the quarter, Valero’s refining throughput volumes were 2,962 thousand barrels per day (MBbls/d), up from 2,835 MBbls/d in second-quarter 2021. Meanwhile, VLO’s refining margin per barrel of throughput increased to $30.01 from the year-ago level of $7.95.