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What's in Store for Marathon Petroleum's (MPC) Q2 Earnings?
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Marathon Petroleum Corporation (MPC - Free Report) is set to release second-quarter results on Aug 1. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $4.56 per share on revenues of $31 billion.
Let’s delve into the factors that might have influenced the independent oil refiner and marketer’s results in the June quarter. But it’s worth taking a look at MPC’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last-reported quarter, the Findlay, OH-based downstream operator handily beat the consensus mark on stronger-than-expected performance of its key Refining & Marketing segment. MPC had reported adjusted earnings per share of $6.09, well above the Zacks Consensus Estimate of $5.74. Revenues of $35.1 billion generated by the firm also came in above the Zacks Consensus Estimate by 8.1%.
Marathon Petroleum beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 14.2%, on average. This is depicted in the graph below:
Marathon Petroleum Corporation Price and EPS Surprise
The Zacks Consensus Estimate for the second-quarter bottom line has been revised 2.6% downward in the past seven days. The estimated figure indicates a 57% deterioration year over year. Meanwhile, the Zacks Consensus Estimate for revenues suggests a 42.8% decrease from the year-ago period.
Factors to Consider
A drop in refining margins is expected to have weighed on Marathon Petroleum’s second-quarter 2023 results on a year-over-year basis. With the metric normalizing from last-year’s spectacular highs, the key contributor to MPC’s earnings — its Refining & Marketing division — is likely to have borne the brunt. Our estimate for the segment’s margin is $17.98 per barrel, implying a contraction of 52.1% from the corresponding period of 2022.
Our forecast also indicates a decrease in capacity utilization and throughput. Our estimate for second-quarter capacity utilization is pegged at 91.3%, suggesting a decline from the 100% achieved a year ago. Meanwhile, net refinery throughput is predicted at 2,860 thousand barrels per day (mbpd), implying a 6.8% year-over-year drop.
Consequently, our estimate for Marathon Petroleum’s Refining & Marketing segment operating income is pegged at $2.8 billion, suggesting a plunge from the prior-year quarter’s profit of $7.1 billion.
On a further bearish note, the increase in Marathon Petroleum’s costs might have dented its to-be-reported bottom line. Our estimate for refining operating costs per barrel is pegged at $5.20, indicating a marginal increase from $5.19 reported in the year-ago quarter. The upward cost trajectory could be attributed to the ongoing inflationary environment and tight labor market.
Offering some respite amid all the negative factors is a marginal improvement in product sales volumes. Going by our model, the second-quarter average refined product sales are pegged at 3,630.2 mbpd compared to 3,615 mbpd in the year-ago period.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Marathon Petroleum is likely to beat estimates in the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -0.15%.
Zacks Rank: MPC currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Marathon Petroleum, here are some firms from the energy space that you may want to consider on the basis of our model:
TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +4.66% and a Zacks Rank #2. The firm is scheduled to release earnings on Jul 28.
TC Energy beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of 2.1%, on average. Valued at around $39.8 billion, TRP has lost 32.2% in a year.
MPLX LP (MPLX - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 1.
MPLX has a trailing four-quarter earnings surprise of 5.9%, on average. Over the past 60 days, the partnership saw the Zacks Consensus Estimate for 2023 move up 1.7%. Valued at around $35.2 billion, the partnership has gained 12.5% in a year.
Murphy USA (MUSA - Free Report) has an Earnings ESP of +0.20% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 2.
Murphy USA has a trailing four-quarter earnings surprise of 15.6%, on average. Over the past 60 days, MUSA saw the Zacks Consensus Estimate for 2023 move up 7.5%. Valued at around $7 billion, the company has gained 18.5% in a year.
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What's in Store for Marathon Petroleum's (MPC) Q2 Earnings?
Marathon Petroleum Corporation (MPC - Free Report) is set to release second-quarter results on Aug 1. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $4.56 per share on revenues of $31 billion.
Let’s delve into the factors that might have influenced the independent oil refiner and marketer’s results in the June quarter. But it’s worth taking a look at MPC’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last-reported quarter, the Findlay, OH-based downstream operator handily beat the consensus mark on stronger-than-expected performance of its key Refining & Marketing segment. MPC had reported adjusted earnings per share of $6.09, well above the Zacks Consensus Estimate of $5.74. Revenues of $35.1 billion generated by the firm also came in above the Zacks Consensus Estimate by 8.1%.
Marathon Petroleum beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 14.2%, on average. This is depicted in the graph below:
Marathon Petroleum Corporation Price and EPS Surprise
Marathon Petroleum Corporation price-eps-surprise | Marathon Petroleum Corporation Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line has been revised 2.6% downward in the past seven days. The estimated figure indicates a 57% deterioration year over year. Meanwhile, the Zacks Consensus Estimate for revenues suggests a 42.8% decrease from the year-ago period.
Factors to Consider
A drop in refining margins is expected to have weighed on Marathon Petroleum’s second-quarter 2023 results on a year-over-year basis. With the metric normalizing from last-year’s spectacular highs, the key contributor to MPC’s earnings — its Refining & Marketing division — is likely to have borne the brunt. Our estimate for the segment’s margin is $17.98 per barrel, implying a contraction of 52.1% from the corresponding period of 2022.
Our forecast also indicates a decrease in capacity utilization and throughput. Our estimate for second-quarter capacity utilization is pegged at 91.3%, suggesting a decline from the 100% achieved a year ago. Meanwhile, net refinery throughput is predicted at 2,860 thousand barrels per day (mbpd), implying a 6.8% year-over-year drop.
Consequently, our estimate for Marathon Petroleum’s Refining & Marketing segment operating income is pegged at $2.8 billion, suggesting a plunge from the prior-year quarter’s profit of $7.1 billion.
On a further bearish note, the increase in Marathon Petroleum’s costs might have dented its to-be-reported bottom line. Our estimate for refining operating costs per barrel is pegged at $5.20, indicating a marginal increase from $5.19 reported in the year-ago quarter. The upward cost trajectory could be attributed to the ongoing inflationary environment and tight labor market.
Offering some respite amid all the negative factors is a marginal improvement in product sales volumes. Going by our model, the second-quarter average refined product sales are pegged at 3,630.2 mbpd compared to 3,615 mbpd in the year-ago period.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Marathon Petroleum is likely to beat estimates in the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -0.15%.
Zacks Rank: MPC currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Marathon Petroleum, here are some firms from the energy space that you may want to consider on the basis of our model:
TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +4.66% and a Zacks Rank #2. The firm is scheduled to release earnings on Jul 28.
You can see the complete list of today’s Zacks #1 Rank stocks here.
TC Energy beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of 2.1%, on average. Valued at around $39.8 billion, TRP has lost 32.2% in a year.
MPLX LP (MPLX - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 1.
MPLX has a trailing four-quarter earnings surprise of 5.9%, on average. Over the past 60 days, the partnership saw the Zacks Consensus Estimate for 2023 move up 1.7%. Valued at around $35.2 billion, the partnership has gained 12.5% in a year.
Murphy USA (MUSA - Free Report) has an Earnings ESP of +0.20% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 2.
Murphy USA has a trailing four-quarter earnings surprise of 15.6%, on average. Over the past 60 days, MUSA saw the Zacks Consensus Estimate for 2023 move up 7.5%. Valued at around $7 billion, the company has gained 18.5% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.