Ohio-based independent oil refiner and marketer Marathon Petroleum Corp. MPC reported strong first-quarter earnings, owing to higher crack spreads and lower costs.
The company reported earnings per share of $3.24, which surpassed the Zacks Consensus Estimate of $2.96. The bottom line also improved massively from the year-ago period adjusted profit of 67 cents.
Quarterly revenues of $17,240 million also beat the Zacks Consensus Estimate of $15,808 million. The top line, however, fell from the year-ago figure of $23,345 million amid.
Segmental Performance
Refining & Marketing: The unit earned $1,316 million in the reported quarter compared with profits of $362 million a year ago. Higher crack spreads and lower costs led to this significant improvement.
Total refined product sales volumes were 2,246 thousand barrels per day (mbpd) compared with 1,964 mbpd in the year-ago quarter. Throughput improved from 1,650 mbpd in the year-ago quarter to 1,852 mbpd.
Speedway: Income from the Speedway retail stations totaled $168 million, almost tripling from the $58 million earned in the year-ago period. Improved margins from light products and merchandise, in addition to contribution from the locations acquired from Hess Corp. HES, aided the results.
Pipeline Transportation: Segment profitability – that consists of 100% of MPLX L.P.’s MPLX operations, a publicly traded midstream partnership – was $67 million, down from $72 million in the first quarter of 2014. Earnings were pulled down by increased operating expenses.
Total Expenses
Marathon Petroleum – an independent offshoot of Marathon Oil Corp. MRO – reported expenses of $15,770 million in first-quarter 2015, 31.4% lower than $22,984 million in the year-ago quarter.
Capital Expenditure, Balance Sheet & Share Repurchase
In the reported quarter, Marathon Petroleum spent $384 million on capital programs (60% on Refining & Marketing segment). As of Mar 31, 2015, this Zacks Rank #2 (Buy) company had cash and cash equivalents of 2,078 million and total debt of $6,743 million, with a debt-to-capitalization ratio of 36%.
Marathon Petroleum returned $345 million in the first quarter through dividends and share repurchase programs.
Announces Stock Split
In a separate development, the fourth largest U.S. refiner announced a 2-for-1 stock split to be distributed in the form of a stock dividend. The split will double the company’s outstanding shares to 422 million.
Strategic Update
Marathon Petroleum announced that it is going to sell the marine business to affiliate MPLX L.P., while noting that it has completed a binding open season for its Cornerstone Pipeline project.
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