We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Delek (DK) Q3 Earnings Beat on Logistics and Retail Strength
Read MoreHide Full Article
Delek US Holdings, Inc. (DK - Free Report) delivered a comprehensive earnings beat in the third quarter of 2019. Notably, robust contribution from the retail and logistics segments boosted its results. The company posted adjusted net income per share of 78 cents, comfortably surpassing the Zacks Consensus Estimate of 68 cents. However, the same fell from the year-ago income of $2.15 per share due to weak contribution from the refining segment.
Quarterly revenues of $2,334.3 million missed the Zacks Consensus Estimate of $2,578 million. The top line also compared unfavorably with the year-ago sales of $2,768.9 million.
Segmental Performance
Refining: Margin from the Refining segment was $127.5 million, down 60% from $319.5 million in the year-ago quarter. The segment’s results were negatively impacted by lower crude differential environment and planned downtime at El Dorado.
Logistics: This unit includes Delek’s 63% interest in Delek Logistics Partners, L.P. (DKL - Free Report) , a publicly-traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets. Margin from the Logistics unit was $46.6 million, up 8.12% from $43.1 million in the year-ago period owing to strong operations in the Paline Pipeline and SALA gathering system, partially offset by a lower gross margin in west Texas.
Retail: Margin for the unit — formed following the acquisition of Alon USA Energy in 2017 — improved 21.6% to $18.6 million from the year-earlier quarter on higher margins and fuel gallons sales. Delek’s merchandise sales came in at $81.5 million with average margin of 30.5% compared with $89.7 million with average margin of 31.3% in the prior year. Its retail fuel gallons sale totaled 54.9 million with average margin of 31 cents per gallon compared with 56 million sale at average margin of 23 cents in third-quarter 2018.
Financials
Total expenses incurred in the quarter declined 10.6% from the prior-year period to $2,246.9 million.
In the reported quarter, Delek spent $110.5 million on capital programs (57.3% on the Refining segment). As of Sep 30, the company had cash and cash equivalents of $1,006.4 million and long-term debt of $1,935.4 million with a debt-to-capitalization ratio of 50.9%.
Delek bought back shares worth $43 million in the third quarter. It is expected to repurchase additional $30 million shares in the fourth.
The company declared a quarterly dividend of 30 cents per share, marking a 3.5% sequential hike. The dividend will be payable Dec 2 to its shareholders of record as of Nov 18.
Delek US Holdings, Inc. Price, Consensus and EPS Surprise
For the fourth quarter, Delek projects its consolidated operating as well as G&A expenses in the range of $165-$175 million and $65-$70 million, respectively.
Total crude throughput for the current quarter is expected between 275,000 and 280,000.
Delek anticipates its full-year capital expenditure guidance to be $414.9 million.
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.5% per year. So be sure to give these hand-picked 7 your immediate attention.
Image: Bigstock
Delek (DK) Q3 Earnings Beat on Logistics and Retail Strength
Delek US Holdings, Inc. (DK - Free Report) delivered a comprehensive earnings beat in the third quarter of 2019. Notably, robust contribution from the retail and logistics segments boosted its results. The company posted adjusted net income per share of 78 cents, comfortably surpassing the Zacks Consensus Estimate of 68 cents. However, the same fell from the year-ago income of $2.15 per share due to weak contribution from the refining segment.
Quarterly revenues of $2,334.3 million missed the Zacks Consensus Estimate of $2,578 million. The top line also compared unfavorably with the year-ago sales of $2,768.9 million.
Segmental Performance
Refining: Margin from the Refining segment was $127.5 million, down 60% from $319.5 million in the year-ago quarter. The segment’s results were negatively impacted by lower crude differential environment and planned downtime at El Dorado.
Logistics: This unit includes Delek’s 63% interest in Delek Logistics Partners, L.P. (DKL - Free Report) , a publicly-traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets. Margin from the Logistics unit was $46.6 million, up 8.12% from $43.1 million in the year-ago period owing to strong operations in the Paline Pipeline and SALA gathering system, partially offset by a lower gross margin in west Texas.
Retail: Margin for the unit — formed following the acquisition of Alon USA Energy in 2017 — improved 21.6% to $18.6 million from the year-earlier quarter on higher margins and fuel gallons sales. Delek’s merchandise sales came in at $81.5 million with average margin of 30.5% compared with $89.7 million with average margin of 31.3% in the prior year. Its retail fuel gallons sale totaled 54.9 million with average margin of 31 cents per gallon compared with 56 million sale at average margin of 23 cents in third-quarter 2018.
Financials
Total expenses incurred in the quarter declined 10.6% from the prior-year period to $2,246.9 million.
In the reported quarter, Delek spent $110.5 million on capital programs (57.3% on the Refining segment). As of Sep 30, the company had cash and cash equivalents of $1,006.4 million and long-term debt of $1,935.4 million with a debt-to-capitalization ratio of 50.9%.
Delek bought back shares worth $43 million in the third quarter. It is expected to repurchase additional $30 million shares in the fourth.
The company declared a quarterly dividend of 30 cents per share, marking a 3.5% sequential hike. The dividend will be payable Dec 2 to its shareholders of record as of Nov 18.
Delek US Holdings, Inc. Price, Consensus and EPS Surprise
Delek US Holdings, Inc. price-consensus-eps-surprise-chart | Delek US Holdings, Inc. Quote
Guidance
For the fourth quarter, Delek projects its consolidated operating as well as G&A expenses in the range of $165-$175 million and $65-$70 million, respectively.
Total crude throughput for the current quarter is expected between 275,000 and 280,000.
Delek anticipates its full-year capital expenditure guidance to be $414.9 million.
Zacks Rank & Key Picks
Delek currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Phillips 66 (PSX - Free Report) and World Fuel Services Corporation , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.5% per year. So be sure to give these hand-picked 7 your immediate attention.
See them now >>