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Independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Free Report) reported third-quarter adjusted earnings per share of $1.87, which comfortably beat the Zacks Consensus Estimate of 97 cents. The outperformance primarily reflects the stronger-than-expected performance of its Refining & Marketing segment. The operating income of the segment totaled $298 billion, surpassing the consensus mark, calling for a loss of $64 million on the back of strong product sales and throughput.
However, the company’s bottom line fell sharply from the year-ago adjusted profit of $8.14 due to a drop in refining margin.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Marathon Petroleum reported revenues of $35.4 billion, which beat the Zacks Consensus Estimate of $31.6 billion but fell 14.9% year over year.
In an important development for investors, MPC’s board of directors declared a quarterly cash dividend of 91 cents per share to its common shareholders of record on Nov. 20. The payout, which represents a 10% sequential increase, will be made on Dec. 10.
Marathon Petroleum Corporation Price, Consensus and EPS Surprise
Refining & Marketing: The Refining & Marketing segment reported an operating income of $298 million, which plunged more than 92% from the year-ago profit of $3.8 billion. The drop primarily reflects lower year-over-year margins and higher costs.
Specifically, the refining margin of $14.35 per barrel declined from $26.16 a year ago. Capacity utilization during the quarter was 94%, unchanged from the corresponding period of 2023.
Meanwhile, total refined product sales volumes were 3,685 thousand barrels per day (mbpd), up from 3,596 mbpd in the year-ago quarter. Throughput rose marginally from 2,959 mbpd in the year-ago quarter to 2,991 mbpd and outperformed the Zacks Consensus Estimate of 2,852 mbpd.
MPC’s operating costs per barrel increased from $5.14 in the year-ago quarter to $5.30.
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 $1.3 billion, up 12.2% from the third quarter of 2023. Earnings were buoyed up by higher rates and volumes processed, together with contribution from acquired assets in the Utica and Permian basins.
Financial Analysis
Marathon Petroleum reported expenses of $34 billion in third-quarter 2024, down 7.6% from the year-ago quarter.
In the reported quarter, Marathon Petroleum spent $950 million on capital programs (39% on Refining & Marketing and 59% on the Midstream segment) compared to $522 million in the year-ago period.
As of Sept. 30, the Zacks Rank #5 (Strong Sell) company had cash and cash equivalents of $4 billion and total debt, including that of MPLX, of $28.2 billion, with a debt-to-capitalization of 52.5%.
In the third quarter, MPC repurchased $2.7 billion of shares and a further $500 million worth of shares in October. The company, which gave an additional $5 billion share repurchase approval, currently has a remaining authorization of $8.5 billion.
While we have discussed Marathon Petroleum’s third-quarter results in detail, let’s take a look at some other key downstream reports of this season.
Valero Energy (VLO - Free Report) reported third-quarter 2024 adjusted earnings of $1.14 per share, which missed the Zacks Consensus Estimate of $1.29 due to the significant decline in refining throughput volumes. Adjusted operating income in the Refining segment totaled $565 million, down from $3.4 billion in the year-ago quarter. The figure also missed our estimate of $1.8 billion.
Valero’s total cost of sales decreased to $32.1 billion from the year-ago figure of $34.6 billion. The figure is also below our estimate of $33 billion, primarily due to lower cost of materials and operating expenses. The third-quarter capital investment totaled $429 million, of which $338 million was allotted for sustaining the business.
Phillips 66 (PSX - Free Report) reported third-quarter 2024 adjusted earnings of $2.04 per share, which beat the Zacks Consensus Estimate of $1.63. However, the bottom line was lower than the year-ago quarter’s level of $4.63. The better-than-expected quarterly results can be primarily attributed to cost reduction and the achievement of Midstream synergy targets. However, this was partially offset by reduced contributions from PSX’s Refining segment due to a decline in realized margins.
Phillips 66 generated $1.13 billion of net cash from operations for the reported quarter, significantly lower than $2.69 billion a year ago. The company’s capital expenditure and investments totaled $358 million. It paid out dividends of $477 million in the third quarter. As of Sept. 30, 2024, cash and cash equivalents were $1.6 billion. Total debt was $19.9 billion, reflecting a debt-to-capitalization of 39.6%.
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Marathon Petroleum Tops Q3 Earnings, Boosts Stock Buyback
Independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Free Report) reported third-quarter adjusted earnings per share of $1.87, which comfortably beat the Zacks Consensus Estimate of 97 cents. The outperformance primarily reflects the stronger-than-expected performance of its Refining & Marketing segment. The operating income of the segment totaled $298 billion, surpassing the consensus mark, calling for a loss of $64 million on the back of strong product sales and throughput.
However, the company’s bottom line fell sharply from the year-ago adjusted profit of $8.14 due to a drop in refining margin.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Marathon Petroleum reported revenues of $35.4 billion, which beat the Zacks Consensus Estimate of $31.6 billion but fell 14.9% year over year.
In an important development for investors, MPC’s board of directors declared a quarterly cash dividend of 91 cents per share to its common shareholders of record on Nov. 20. The payout, which represents a 10% sequential increase, will be made on Dec. 10.
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 $298 million, which plunged more than 92% from the year-ago profit of $3.8 billion. The drop primarily reflects lower year-over-year margins and higher costs.
Specifically, the refining margin of $14.35 per barrel declined from $26.16 a year ago. Capacity utilization during the quarter was 94%, unchanged from the corresponding period of 2023.
Meanwhile, total refined product sales volumes were 3,685 thousand barrels per day (mbpd), up from 3,596 mbpd in the year-ago quarter. Throughput rose marginally from 2,959 mbpd in the year-ago quarter to 2,991 mbpd and outperformed the Zacks Consensus Estimate of 2,852 mbpd.
MPC’s operating costs per barrel increased from $5.14 in the year-ago quarter to $5.30.
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 $1.3 billion, up 12.2% from the third quarter of 2023. Earnings were buoyed up by higher rates and volumes processed, together with contribution from acquired assets in the Utica and Permian basins.
Financial Analysis
Marathon Petroleum reported expenses of $34 billion in third-quarter 2024, down 7.6% from the year-ago quarter.
In the reported quarter, Marathon Petroleum spent $950 million on capital programs (39% on Refining & Marketing and 59% on the Midstream segment) compared to $522 million in the year-ago period.
As of Sept. 30, the Zacks Rank #5 (Strong Sell) company had cash and cash equivalents of $4 billion and total debt, including that of MPLX, of $28.2 billion, with a debt-to-capitalization of 52.5%.
In the third quarter, MPC repurchased $2.7 billion of shares and a further $500 million worth of shares in October. The company, which gave an additional $5 billion share repurchase approval, currently has a remaining authorization of $8.5 billion.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Important Refining & Marketing Earnings So Far
While we have discussed Marathon Petroleum’s third-quarter results in detail, let’s take a look at some other key downstream reports of this season.
Valero Energy (VLO - Free Report) reported third-quarter 2024 adjusted earnings of $1.14 per share, which missed the Zacks Consensus Estimate of $1.29 due to the significant decline in refining throughput volumes. Adjusted operating income in the Refining segment totaled $565 million, down from $3.4 billion in the year-ago quarter. The figure also missed our estimate of $1.8 billion.
Valero’s total cost of sales decreased to $32.1 billion from the year-ago figure of $34.6 billion. The figure is also below our estimate of $33 billion, primarily due to lower cost of materials and operating expenses. The third-quarter capital investment totaled $429 million, of which $338 million was allotted for sustaining the business.
Phillips 66 (PSX - Free Report) reported third-quarter 2024 adjusted earnings of $2.04 per share, which beat the Zacks Consensus Estimate of $1.63. However, the bottom line was lower than the year-ago quarter’s level of $4.63. The better-than-expected quarterly results can be primarily attributed to cost reduction and the achievement of Midstream synergy targets. However, this was partially offset by reduced contributions from PSX’s Refining segment due to a decline in realized margins.
Phillips 66 generated $1.13 billion of net cash from operations for the reported quarter, significantly lower than $2.69 billion a year ago. The company’s capital expenditure and investments totaled $358 million. It paid out dividends of $477 million in the third quarter. As of Sept. 30, 2024, cash and cash equivalents were $1.6 billion. Total debt was $19.9 billion, reflecting a debt-to-capitalization of 39.6%.