We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Tesoro Corporation (TSO) Q2 Earnings and Revenues Beat
Read MoreHide Full Article
Independent refiner Tesoro Corporation reported second-quarter 2016 adjusted earnings from continuing operations of $3.47 per share, which surpassed the Zacks Consensus Estimate of $1.77. Significant contribution from the logistics segment supported the results. The bottom line, however, deteriorated from the year-ago quarter figure of $4.62 per share on lower income from the refining and the marketing units.
Tesoro Corporation reported quarterly revenues of $6,285 million as against $8,232 million in the comparable quarter last year. However, the top line beat the Zacks Consensus Estimate of $4,712 million.
Segmental Analysis
Refining: The segment posted an operating income of $520 million, considerably lower than $757 million earned in the year-earlier quarter. Decrease in refining margins hurt the results.
Logistics:During the second quarter, the ‘logistics’ segment generated operating profit of $125 million, up from $104 million in the year-ago quarter. The improvement can be attributed to growth in the volume of the unit`s crude oil gathering and natural gas gathering and processing businesses as well as contributions from the LA Storage and Handling Assets acquisition.
Marketing: The segment earned $161 million compared with $212 million in the second quarter of 2015. The poor performance of the segment can be attributed to a decline in fuel margins.
Throughput
Total refining throughput averaged 802 thousand barrels per day (MBbl/d) as against 783 MBbl/d in the prior-year quarter.
Overall, throughput volumes in California (consisting of Martinez and Los Angeles refineries) dipped 1.9% year over year to 513 MBbl/d. Throughput in Tesoro Corporation's Pacific Northwest (Alaska and Washington) operations increased to 158 MBbl/d from 154 MBbl/d in the year-ago comparable quarter. Moreover, throughput volumes in Mid-Continent (North Dakota and Utah) grew 23.6% year over year to 131 MBbl/d.
Refining Margins
Gross refining margin dropped 17.8% year over year to $15.7 per barrel.
Region-wise, refining margin increased almost 21.1% to $15.9 per barrel in California, was up 2.1% to $17.56 per barrel in the Mid-Continent but plunged more than19.9% to $13.66 per barrel in Pacific Northwest, all on a year-over-year basis.
Realized Costs & Prices
Manufacturing costs before depreciation and amortization decreased 10.2% from the year-earlier level to $5.01 per barrel.
Total refined product sales averaged 974 Mbbl/d compared with 963 Mbbl/d in the second quarter of 2015.
Operating Cost
Tesoro Corporation's operating costs in the reported quarter was $606 million, essentially unchanged from the year-ago quarter.
Capital Expenditure & Balance Sheet
Tesoro Corporation's total capital spending in the reported quarter (including TLLP) totaled $209 million (65.6% directed toward refining segment).
As of Jun 30, 2016, the company had $1,121 million of cash and cash equivalents and long-term debt of $4,501 million, representing a debt-to-capitalization ratio of 35.4%.
Guidance
Tesoro Corporation expects throughput margin for the third quarter between 835 MBbl/d and 885 MBbl/d.
Dividend Increase
Tesoro Corporation reported that it has increased the quarterly cash dividend by 10% to $0.55 per share.
Zacks Rank
Tesoro Corporation currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the oil and gas sector include GeoPark Limited (GPRK - Free Report) , Sasol Ltd. (SSL - Free Report) and North Atlantic Drilling Limited . Each of these stocks sports a Zacks Rank #1 (Strong 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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Tesoro Corporation (TSO) Q2 Earnings and Revenues Beat
Independent refiner Tesoro Corporation reported second-quarter 2016 adjusted earnings from continuing operations of $3.47 per share, which surpassed the Zacks Consensus Estimate of $1.77. Significant contribution from the logistics segment supported the results. The bottom line, however, deteriorated from the year-ago quarter figure of $4.62 per share on lower income from the refining and the marketing units.
Tesoro Corporation reported quarterly revenues of $6,285 million as against $8,232 million in the comparable quarter last year. However, the top line beat the Zacks Consensus Estimate of $4,712 million.
Segmental Analysis
Refining: The segment posted an operating income of $520 million, considerably lower than $757 million earned in the year-earlier quarter. Decrease in refining margins hurt the results.
Logistics:During the second quarter, the ‘logistics’ segment generated operating profit of $125 million, up from $104 million in the year-ago quarter. The improvement can be attributed to growth in the volume of the unit`s crude oil gathering and natural gas gathering and processing businesses as well as contributions from the LA Storage and Handling Assets acquisition.
Marketing: The segment earned $161 million compared with $212 million in the second quarter of 2015. The poor performance of the segment can be attributed to a decline in fuel margins.
Throughput
Total refining throughput averaged 802 thousand barrels per day (MBbl/d) as against 783 MBbl/d in the prior-year quarter.
TESORO CORP Price, Consensus and EPS Surprise
TESORO CORP Price, Consensus and EPS Surprise | TESORO CORP Quote
Overall, throughput volumes in California (consisting of Martinez and Los Angeles refineries) dipped 1.9% year over year to 513 MBbl/d. Throughput in Tesoro Corporation's Pacific Northwest (Alaska and Washington) operations increased to 158 MBbl/d from 154 MBbl/d in the year-ago comparable quarter. Moreover, throughput volumes in Mid-Continent (North Dakota and Utah) grew 23.6% year over year to 131 MBbl/d.
Refining Margins
Gross refining margin dropped 17.8% year over year to $15.7 per barrel.
Region-wise, refining margin increased almost 21.1% to $15.9 per barrel in California, was up 2.1% to $17.56 per barrel in the Mid-Continent but plunged more than19.9% to $13.66 per barrel in Pacific Northwest, all on a year-over-year basis.
Realized Costs & Prices
Manufacturing costs before depreciation and amortization decreased 10.2% from the year-earlier level to $5.01 per barrel.
Total refined product sales averaged 974 Mbbl/d compared with 963 Mbbl/d in the second quarter of 2015.
Operating Cost
Tesoro Corporation's operating costs in the reported quarter was $606 million, essentially unchanged from the year-ago quarter.
Capital Expenditure & Balance Sheet
Tesoro Corporation's total capital spending in the reported quarter (including TLLP) totaled $209 million (65.6% directed toward refining segment).
As of Jun 30, 2016, the company had $1,121 million of cash and cash equivalents and long-term debt of $4,501 million, representing a debt-to-capitalization ratio of 35.4%.
Guidance
Tesoro Corporation expects throughput margin for the third quarter between 835 MBbl/d and 885 MBbl/d.
Dividend Increase
Tesoro Corporation reported that it has increased the quarterly cash dividend by 10% to $0.55 per share.
Zacks Rank
Tesoro Corporation currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the oil and gas sector include GeoPark Limited (GPRK - Free Report) , Sasol Ltd. (SSL - Free Report) and North Atlantic Drilling Limited . Each of these stocks sports a Zacks Rank #1 (Strong 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 >>