Marathon Petroleum (MPC) Beats On Q4 Earnings, Revenues

Marathon Petroleum Corporation (NYSE:MPC) reported strong fourth-quarter 2017 results on higher refining margin. The company’s earnings per share came in at $1.05, above the Zacks Consensus Estimate of $1.00. Earnings surged from the year-ago period's figure by 144.2%. Specifically, refining margin of $13.12 per barrel increased versus $11.31 a year ago.

Marathon Petroleum’s revenues of $21,236 million topped the Zacks Consensus Estimate of $19,698 million and improved 22.9% year over year.

Marathon Petroleum Corporation Price, Consensus and EPS Surprise

Segmental Performance

Refining & Marketing: Operating income from the Refining & Marketing segment — which is the main contributor to Marathon Petroleum earnings — was $732 million compared with $166 million in the year-ago quarter. The jump reflects wider crack spread leading to stronger refining margin and higher capacity utilization.

Total refined product sales volumes were 2,414 thousand barrels per day (mbpd), up from the 2,240 mbpd in the year-ago quarter. Moreover, throughput improved from 1,810 mbpd in the year-ago quarter to 2,024 mbpd. Capacity utilization, at 101%, was up from 93% in the year-ago quarter.

Speedway: Income from the Speedway retail stations totaled $149 million compared with $165 million in the prior-year quarter. Higher operating expenses and lower merchandise margins affected the results.

Midstream: This unit includes Marathon Petroleum’s 100% interest in MPLX L.P. (NYSE:MPLX) , a publicly-traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.

Segment profitability was $343 million, up from $296 million in year-ago quarter. Earnings were buoyed by strength in volumes gathered, processed and fractionated.

Total Expenses

Marathon Petroleum — which spun off from Marathon Oil (NYSE:MRO) in 2011 — reported expenses of $20,117 million in fourth-quarter 2017, 20.2% higher than the year-ago quarter.

Capital Expenditure, Balance Sheet & Share Repurchase

In the quarter, Marathon Petroleum spent $956 million on capital programs (51% on the Midstream segment). As of Dec 31, 2017, the company had cash and cash equivalents of $3,011 million and total debt of $12,946 million, with a debt-to-capitalization ratio of 38.4%.

During the quarter under review, Marathon Petroleum returned $945 million of capital to shareholders, including $750 million of share repurchases.

Zacks Rank & Another Stock to Consider

Marathon Petroleum sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Meanwhile, one can also look at another Rank #1 refiner Delek US Holdings (NYSE:DK) which expects to witness a year-over-year increase of 131.6% in 2018 earnings.

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