On Feb 26, oil refiner and marketer Western Refining Inc. WNR reported strong fourth-quarter results courtesy of significant improvement in refining margins. Following the results, shares have gained about 8% on the NYSE.
The company’s earnings per share (excluding special items) came in at $1.19, which surpassed the Zacks Consensus Estimate of $1.04 and was also substantially higher than the year-ago adjusted figure of 60 cents.
Quarterly net sales of about $3.02 billion surpassed the Zacks Consensus Estimate of $2.5 billion and was marginally higher than the year-ago quarter level.
For the year ended Dec 31, 2014, Western Refining reported an income (excluding one-time items) of $5.61 per share, higher than the year-ago adjusted profit of $2.79 per share and also above the Zacks Consensus Estimate of $4.44. Net sales were recorded at $15.2 billion against $10.1 billion reported a year ago.
Refining Segment: Analysis
Throughput: The total refining throughput averaged 158,231 barrels per day (Bbl/d), up from 157,252 Bbl/d in the year-ago quarter. Overall, throughput volumes at the El Paso refinery decreased about 3% year over year to 129,624 Bbl/d, while the Gallup unit recorded throughput volumes of 28,607 Bbl/d, up 21.6% from the year-earlier level.
Refining Margins: Gross refining margin recorded a massive year-over-year improvement from $7.99 to $22.13 per barrel. Geographically, refining margin increased 9.8% to $14.99 per barrel at El Paso and 14.8% to $16.56 per barrel at Gallup.
Operating Expenses: Direct operating expenses at El Paso during the quarter averaged $4.55 per barrel, up14.6% year over year.
Direct operating expenses at Gallup fell 29.7% year over year to $7.90 per barrel.
Direct operating expenses at Western Refining’s units, however, were $5.59 per barrel for the three months ended Dec 31, 2014, up from $5.14 in the year-ago period.
Capital Expenditure & Balance Sheet
Headquartered in El Paso, TX, Western Refining’s total capital spending during the quarter was $76 million, substantially higher than $57.9 million in the fourth quarter of 2013. As of Dec 31, 2014, Western Refining had cash and cash equivalents of $431.2 million and total debt of approximately $1,548 million, representing a debt-to-capitalization ratio of 35.7%.
Dividend & Share Repurchases
In 2014, the company returned $553 million to shareholders through dividends and share repurchases.
Zacks Rank & Other Stock Picks
Western Refining currently holds a Zacks Rank #2 (Buy).
Other players from the same sector include Marathon Petroleum Corporation MPC, Valero Energy Corporation VLO and Murphy USA Inc. MUSA. All these stocks hold a Zacks Rank #2 (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
Be the first to comment