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Marathon Petroleum (MPC) Up 5.1% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Marathon Petroleum (MPC - Free Report) . Shares have added about 5.1% 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 drivers.
Independent oil refiner and marketer Marathon Petroleum reported adjusted earnings per share of $6.65, which comfortably beat the Zacks Consensus Estimate of $5.54 and compared with a profit of merely $1.30 per share in the year-ago period.
The company’s bottom line was favorably impacted by the stronger-than-expected performance of its key Refining & Marketing segment. Operating income of the segment totaled $3.9 billion, ahead of its Zacks Consensus Estimate by 38%.
Marathon Petroleum reported revenues of $40.1 billion, which beat the Zacks Consensus Estimate of $32 billion and improved 12.6% year over year.
In October 2022, the company completed its target of buying 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.
In the fourth quarter, MPC repurchased $1.8 billion of shares and a further $700 million worth of shares this year till Jan 27. The company, which gave an additional $5 billion share repurchase approval, currently has a remaining authorization of $7.6 billion.
Marathon Petroleum plans to spend $1.3 billion in capital expenditure this year. Of this, some $360 million is earmarked for low-carbon opportunities.
Inside MPC’s Segments
Refining & Marketing: The Refining & Marketing segment reported an operating income of $3.9 billion, which soared from the year-ago profit of just $881 million. The jump primarily reflects higher year-over-year margins that more than offset lower throughputs and refined product sales.
Specifically, the refining margin of $28.82 per barrel improved significantly from $15.88 a year ago. Capacity utilization during the quarter was 94% — same as last year. However, total refined product sales volumes were 3,532 thousand barrels per day (mbpd), down from 3,600 mbpd in the year-ago quarter. Throughput also fell from 2,936 mbpd in the year-ago quarter to 2,895 mbpd and missed the Zacks Consensus Estimate of 2,926 mbpd.
Further, operating costs per barrel increased 4.9% year over year to $4.62. The cost escalation was blamed on higher energy-related outgo, more turnaround activity, as well as a special compensation expense.
Midstream: This unit mainly reflects Marathon Petroleum’s general partner and majority limited partner interests in MPLX LP — a publicly traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.
Segment profitability was $1.1 billion, edging up 1.7% from the fourth quarter of 2021. Earnings were supported by higher tariff rates and the stable, fee-based revenues from MPLX’s wide range of midstream energy services.
Costs, Capex & Balance Sheet
Marathon Petroleum reported expenses of $35.4 billion in fourth-quarter 2022, rising 4.5% from the year-ago quarter.
In the reported quarter, Marathon Petroleum spent $849 million on capital programs (59% on Refining & Marketing and 35% on the Midstream segment) compared to $651 million in the year-ago period. As of Dec 31, the company had cash and cash equivalents of $8.6 billion and total debt, including that of MPLX, of $26.7 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 fresh estimates.
The consensus estimate has shifted 26.12% due to these changes.
VGM Scores
Currently, Marathon Petroleum has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Marathon Petroleum has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Marathon Petroleum (MPC) Up 5.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Marathon Petroleum (MPC - Free Report) . Shares have added about 5.1% 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 drivers.
Marathon Petroleum Posts Better-Than-Expected Q4 Earnings
Independent oil refiner and marketer Marathon Petroleum reported adjusted earnings per share of $6.65, which comfortably beat the Zacks Consensus Estimate of $5.54 and compared with a profit of merely $1.30 per share in the year-ago period.
The company’s bottom line was favorably impacted by the stronger-than-expected performance of its key Refining & Marketing segment. Operating income of the segment totaled $3.9 billion, ahead of its Zacks Consensus Estimate by 38%.
Marathon Petroleum reported revenues of $40.1 billion, which beat the Zacks Consensus Estimate of $32 billion and improved 12.6% year over year.
In October 2022, the company completed its target of buying 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.
In the fourth quarter, MPC repurchased $1.8 billion of shares and a further $700 million worth of shares this year till Jan 27. The company, which gave an additional $5 billion share repurchase approval, currently has a remaining authorization of $7.6 billion.
Marathon Petroleum plans to spend $1.3 billion in capital expenditure this year. Of this, some $360 million is earmarked for low-carbon opportunities.
Inside MPC’s Segments
Refining & Marketing: The Refining & Marketing segment reported an operating income of $3.9 billion, which soared from the year-ago profit of just $881 million. The jump primarily reflects higher year-over-year margins that more than offset lower throughputs and refined product sales.
Specifically, the refining margin of $28.82 per barrel improved significantly from $15.88 a year ago. Capacity utilization during the quarter was 94% — same as last year. However, total refined product sales volumes were 3,532 thousand barrels per day (mbpd), down from 3,600 mbpd in the year-ago quarter. Throughput also fell from 2,936 mbpd in the year-ago quarter to 2,895 mbpd and missed the Zacks Consensus Estimate of 2,926 mbpd.
Further, operating costs per barrel increased 4.9% year over year to $4.62. The cost escalation was blamed on higher energy-related outgo, more turnaround activity, as well as a special compensation expense.
Midstream: This unit mainly reflects Marathon Petroleum’s general partner and majority limited partner interests in MPLX LP — a publicly traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.
Segment profitability was $1.1 billion, edging up 1.7% from the fourth quarter of 2021. Earnings were supported by higher tariff rates and the stable, fee-based revenues from MPLX’s wide range of midstream energy services.
Costs, Capex & Balance Sheet
Marathon Petroleum reported expenses of $35.4 billion in fourth-quarter 2022, rising 4.5% from the year-ago quarter.
In the reported quarter, Marathon Petroleum spent $849 million on capital programs (59% on Refining & Marketing and 35% on the Midstream segment) compared to $651 million in the year-ago period. As of Dec 31, the company had cash and cash equivalents of $8.6 billion and total debt, including that of MPLX, of $26.7 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 fresh estimates.
The consensus estimate has shifted 26.12% due to these changes.
VGM Scores
Currently, Marathon Petroleum has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Marathon Petroleum has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.