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Tesoro Corporation (TSO) Q2 Earnings and Revenues Beat
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Independent refiner Tesoro Corporation reported second-quarter 2016 adjusted earnings from continuing operations of $3.47 per share, which surpassed the Zacks Consensus Estimate of $1.77. Significant contribution from the logistics segment supported the results. The bottom line, however, deteriorated from the year-ago quarter figure of $4.62 per share on lower income from the refining and the marketing units.
Tesoro Corporation reported quarterly revenues of $6,285 million as against $8,232 million in the comparable quarter last year. However, the top line beat the Zacks Consensus Estimate of $4,712 million.
Segmental Analysis
Refining: The segment posted an operating income of $520 million, considerably lower than $757 million earned in the year-earlier quarter. Decrease in refining margins hurt the results.
Logistics:During the second quarter, the ‘logistics’ segment generated operating profit of $125 million, up from $104 million in the year-ago quarter. The improvement can be attributed to growth in the volume of the unit`s crude oil gathering and natural gas gathering and processing businesses as well as contributions from the LA Storage and Handling Assets acquisition.
Marketing: The segment earned $161 million compared with $212 million in the second quarter of 2015. The poor performance of the segment can be attributed to a decline in fuel margins.
Throughput
Total refining throughput averaged 802 thousand barrels per day (MBbl/d) as against 783 MBbl/d in the prior-year quarter.
Overall, throughput volumes in California (consisting of Martinez and Los Angeles refineries) dipped 1.9% year over year to 513 MBbl/d. Throughput in Tesoro Corporation's Pacific Northwest (Alaska and Washington) operations increased to 158 MBbl/d from 154 MBbl/d in the year-ago comparable quarter. Moreover, throughput volumes in Mid-Continent (North Dakota and Utah) grew 23.6% year over year to 131 MBbl/d.
Refining Margins
Gross refining margin dropped 17.8% year over year to $15.7 per barrel.
Region-wise, refining margin increased almost 21.1% to $15.9 per barrel in California, was up 2.1% to $17.56 per barrel in the Mid-Continent but plunged more than19.9% to $13.66 per barrel in Pacific Northwest, all on a year-over-year basis.
Realized Costs & Prices
Manufacturing costs before depreciation and amortization decreased 10.2% from the year-earlier level to $5.01 per barrel.
Total refined product sales averaged 974 Mbbl/d compared with 963 Mbbl/d in the second quarter of 2015.
Operating Cost
Tesoro Corporation's operating costs in the reported quarter was $606 million, essentially unchanged from the year-ago quarter.
Capital Expenditure & Balance Sheet
Tesoro Corporation's total capital spending in the reported quarter (including TLLP) totaled $209 million (65.6% directed toward refining segment).
As of Jun 30, 2016, the company had $1,121 million of cash and cash equivalents and long-term debt of $4,501 million, representing a debt-to-capitalization ratio of 35.4%.
Guidance
Tesoro Corporation expects throughput margin for the third quarter between 835 MBbl/d and 885 MBbl/d.
Dividend Increase
Tesoro Corporation reported that it has increased the quarterly cash dividend by 10% to $0.55 per share.
Zacks Rank
Tesoro Corporation currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the oil and gas sector include GeoPark Limited (GPRK - Free Report) , Sasol Ltd. (SSL - Free Report) and North Atlantic Drilling Limited . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Tesoro Corporation (TSO) Q2 Earnings and Revenues Beat
Independent refiner Tesoro Corporation reported second-quarter 2016 adjusted earnings from continuing operations of $3.47 per share, which surpassed the Zacks Consensus Estimate of $1.77. Significant contribution from the logistics segment supported the results. The bottom line, however, deteriorated from the year-ago quarter figure of $4.62 per share on lower income from the refining and the marketing units.
Tesoro Corporation reported quarterly revenues of $6,285 million as against $8,232 million in the comparable quarter last year. However, the top line beat the Zacks Consensus Estimate of $4,712 million.
Segmental Analysis
Refining: The segment posted an operating income of $520 million, considerably lower than $757 million earned in the year-earlier quarter. Decrease in refining margins hurt the results.
Logistics:During the second quarter, the ‘logistics’ segment generated operating profit of $125 million, up from $104 million in the year-ago quarter. The improvement can be attributed to growth in the volume of the unit`s crude oil gathering and natural gas gathering and processing businesses as well as contributions from the LA Storage and Handling Assets acquisition.
Marketing: The segment earned $161 million compared with $212 million in the second quarter of 2015. The poor performance of the segment can be attributed to a decline in fuel margins.
Throughput
Total refining throughput averaged 802 thousand barrels per day (MBbl/d) as against 783 MBbl/d in the prior-year quarter.
TESORO CORP Price, Consensus and EPS Surprise
TESORO CORP Price, Consensus and EPS Surprise | TESORO CORP Quote
Overall, throughput volumes in California (consisting of Martinez and Los Angeles refineries) dipped 1.9% year over year to 513 MBbl/d. Throughput in Tesoro Corporation's Pacific Northwest (Alaska and Washington) operations increased to 158 MBbl/d from 154 MBbl/d in the year-ago comparable quarter. Moreover, throughput volumes in Mid-Continent (North Dakota and Utah) grew 23.6% year over year to 131 MBbl/d.
Refining Margins
Gross refining margin dropped 17.8% year over year to $15.7 per barrel.
Region-wise, refining margin increased almost 21.1% to $15.9 per barrel in California, was up 2.1% to $17.56 per barrel in the Mid-Continent but plunged more than19.9% to $13.66 per barrel in Pacific Northwest, all on a year-over-year basis.
Realized Costs & Prices
Manufacturing costs before depreciation and amortization decreased 10.2% from the year-earlier level to $5.01 per barrel.
Total refined product sales averaged 974 Mbbl/d compared with 963 Mbbl/d in the second quarter of 2015.
Operating Cost
Tesoro Corporation's operating costs in the reported quarter was $606 million, essentially unchanged from the year-ago quarter.
Capital Expenditure & Balance Sheet
Tesoro Corporation's total capital spending in the reported quarter (including TLLP) totaled $209 million (65.6% directed toward refining segment).
As of Jun 30, 2016, the company had $1,121 million of cash and cash equivalents and long-term debt of $4,501 million, representing a debt-to-capitalization ratio of 35.4%.
Guidance
Tesoro Corporation expects throughput margin for the third quarter between 835 MBbl/d and 885 MBbl/d.
Dividend Increase
Tesoro Corporation reported that it has increased the quarterly cash dividend by 10% to $0.55 per share.
Zacks Rank
Tesoro Corporation currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the oil and gas sector include GeoPark Limited (GPRK - Free Report) , Sasol Ltd. (SSL - Free Report) and North Atlantic Drilling Limited . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>