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HollyFrontier (HFC) Tops Q4 Earnings, Lags Sales Estimates

Published 02/19/2019, 10:47 PM
Updated 07/09/2023, 06:31 AM
HollyFrontier Corp. (NYSE:HFC) reported fourth-quarter 2018 net income per share (excluding special items) of $2.25, beating the Zacks Consensus Estimate of $1.99 and also exceeding the year-ago level of $0.70, thanks to improving refining margins. Notably, HollyFrontier's competitors, including Valero Energy Corporation (NYSE:VLO) , Marathon Petroleum Corporation (NYSE:MPC) and Phillips 66 (NYSE:PSX) also topped earnings estimates in their latest quarterly releases.
HollyFrontier generated revenues of $4.3 billion, which missed the consensus mark of $5.9 billion but were ahead of fourth-quarter 2017 sales of $4 billion.

HollyFrontier Corporation Price, Consensus and EPS Surprise

HollyFrontier Corporation Price, Consensus and EPS Surprise | HollyFrontier Corporation Quote

Segmental Information
Refining: Adjusted EBITDA from the Refining segment, which is the main contributor to HollyFrontier’s earnings, was $583.4 million. This reflected a healthy improvement from the year-ago income of $233.1 million, thanks to wider gross margins, which jumped 76.7% to $22.17 per barrel.
Total refined product sales volumes averaged 443,670 barrels per day (bpd), down 8% from 482,860 bpd in the year-ago quarter amid lower volumes from the Mid-Continent region that accounts for a bulk of the company’s total throughput. Throughput decreased from 497,450 bpd in the year-ago quarter to 440,670 bpd. Meanwhile, capacity utilization was 88.7%, down from 100.9% in fourth-quarter 2017. Planned turnaround at El Dorado facility impacted throughput levels and refinery utilization.
Lubricants and Specialty Products: The segment recorded a negative EBITDA of $3.9 million against $40.5-million profit reported in the year-ago quarter, owing to continued weakness in base oil market and turnaround activities in the Mississauga plant in the quarterunderreview. Product sales averaged 27,550 bpd, decreasing from the prior-year level of 29,670 bpd. Throughput fell20% year over year to 16,790 bpd in the reported quarter.
HEP: This unit includes HollyFrontier’s 57% interest in Holly Energy Partners L.P. (HEP), which is a publicly-traded master limited partnership that owns, operates, develops and acquires pipelines, as well as other midstream assets.
Segment EBITDA was $89.9 million, down from $124.6 million in the prior-year period amid lower volumes from the UNEV pipeline and maintenance downtime at Woods Cross during the quarter.
Balance Sheet
As of Dec 31, 2018, the U.S. refiner had approximately $1.1 billion in cash and cash equivalents, and $2.4 billion in net long-term debt, representing a debt-to-capitalization ratio of 27.3%.
During the quarter, the Zacks Rank #5 (Strong Sell) company paid $57.6 million in dividends and bought back shares worth $185.2 million.
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Phillips 66 (PSX): Free Stock Analysis Report

Valero Energy Corporation (VLO): Free Stock Analysis Report

HollyFrontier Corporation (HFC): Free Stock Analysis Report

Marathon Petroleum Corporation (MPC): Free Stock Analysis Report

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