A month has gone by since the last earnings report for Marathon Petroleum (MPC Quick QuoteMPC - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Marathon Petroleum due for a breakout? 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 catalysts.

Marathon Overcomes Lower Margins, Tops Q3 Earnings

Marathon Petroleum 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. 

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.

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 Quick QuoteMPLX - Research 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 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.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, Marathon Petroleum has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 indicates a downward shift. Notably, Marathon Petroleum has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Marathon Petroleum belongs to the Zacks Oil and Gas - Refining and Marketing industry. Another stock from the same industry, Equinor (EQNR Quick QuoteEQNR - Free Report) , has gained 6.8% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.

Equinor reported revenues of $25.45 billion in the last reported quarter, representing a year-over-year change of -2.2%. EPS of $0.79 for the same period compares with $0.92 a year ago.

Equinor is expected to post earnings of $0.82 per share for the current quarter, representing a year-over-year change of +28.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.8%.

Equinor has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.