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.
Independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Free Report) reported second-quarter adjusted earnings per share of $4.12, which comfortably beat the Zacks Consensus Estimate of $3.04. The outperformance primarily reflects the stronger-than-expected performance of its Refining & Marketing segment. Operating income of the segment totaled $1.3 billion, surpassing the consensus mark of $1 billion.
However, the company’s bottom line fell from the year-ago adjusted profit of $5.32 due to a drop in refining margin.
Marathon Petroleum reported revenues of $38.4 billion, which beat the Zacks Consensus Estimate of $32 billion and improved 4.2% year over year.
Marathon Petroleum Corporation Price, Consensus and EPS Surprise
Refining & Marketing: The Refining & Marketing segment reported an operating income of $1.3 billion, which fell 42.3% from the year-ago profit of $2.3 billion. The drop primarily reflects lower year-over-year margins, partly offset by an increase in capacity utilization.
Specifically, the refining margin of $17.37 per barrel declined from $22.10 a year ago. But capacity utilization during the quarter was 97%, up from 93% in the corresponding period of 2023.
Meanwhile, total refined product sales volumes were 3,742 thousand barrels per day (mbpd), down from 3,581 mbpd in the year-ago quarter. But throughput rose from 2,925 mbpd in the year-ago quarter to 3,065 mbpd and outperformed the Zacks Consensus Estimate of 2,968 mbpd.
MPC’s operating costs per barrel decreased from $5.15 in the year-ago quarter to $4.97.
Midstream: This unit mainly reflects Marathon Petroleum’s general partner and majority limited partner interests in MPLX LP (MPLX) — a publicly traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.
Segment profitability was $1.3 billion, up 6.2% from the second quarter of 2023. Earnings were buoyed up by higher rates and volumes processed, together with contribution from acquired assets.
Financial Analysis
Marathon Petroleum reported expenses of $35.8 billion in second-quarter 2024, up 6.9% from the year-ago quarter.
In the reported quarter, Marathon Petroleum spent $569 million on capital programs (53% on Refining & Marketing and 42% on the Midstream segment) compared to $562 million in the year-ago period.
As of Jun 30, the Zacks Rank #4 (Sell) company had cash and cash equivalents of $4.4 billion and total debt, including that of MPLX, of $28.9 billion, with a debt-to-capitalization of 50.9%.
In the second quarter, MPC repurchased $2.9 billion of shares and a further $900 million worth of shares in July. The company currently has a remaining authorization of $5.8 billion.
While we have discussed Marathon Petroleum’s second-quarter result in detail, let’s take a look at some other key energy reports of this season.
Oil service biggie Halliburton (HAL - Free Report) reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets. Meanwhile, revenues of $5.8 billion were $35 million higher than the corresponding period of 2023 but missed the Zacks Consensus Estimate of $6 billion due to weak performance in the North American region.
Halliburton reported second-quarter capital expenditure of $347 million, higher than our projection of $303 million. As of Jun 30, 2024, the company had approximately $2.1 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth its stock during the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to free cash flow of $793 million.
ConocoPhillips (COP - Free Report) , one of the world’s largest independent oil and gas producers, reported second-quarter 2024 adjusted earnings per share of $1.98, missing the Zacks Consensus Estimate of $2.06. The bottom line, however, improved from the prior-year quarter’s $1.84 per share. ConocoPhillips’ higher costs and expenses led to a weaker-than-expected bottom line. The negatives were partially offset by strong oil equivalent production volumes — up 7.8% year over year.
As of Jun 30, 2024, ConocoPhillips had $4.3 billion in cash and cash equivalents. COP’s total long-term debt was $17 billion, while it had a short-term debt of $1.3 billion. Capital expenditure and investments totaled $3 billion. Net cash provided by operating activities was $4.9 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported second-quarter 2024 adjusted earnings of $2.71 per share, which beat the Zacks Consensus Estimate of $2.61, driven by an increase in refining throughput volumes. Adjusted operating income in the Refining segment totaled $1.2 billion, down from $2.4 billion in the year-ago quarter. The figure also missed our estimate of $2.1 billion.
Valero’s total cost of sales increased to $33.1 billion from the year-ago figure of $31.5 billion. The figure is also above our estimate of $31.3 billion, primarily due to higher material costs. The second-quarter capital investment totaled $420 million, of which $329 million was allotted for sustaining the business.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Marathon (MPC) Overcomes Lower Margins, Tops Q2 Earnings
Independent oil refiner and marketer Marathon Petroleum Corporation (MPC - Free Report) reported second-quarter adjusted earnings per share of $4.12, which comfortably beat the Zacks Consensus Estimate of $3.04. The outperformance primarily reflects the stronger-than-expected performance of its Refining & Marketing segment. Operating income of the segment totaled $1.3 billion, surpassing the consensus mark of $1 billion.
However, the company’s bottom line fell from the year-ago adjusted profit of $5.32 due to a drop in refining margin.
Marathon Petroleum reported revenues of $38.4 billion, which beat the Zacks Consensus Estimate of $32 billion and improved 4.2% year over year.
Marathon Petroleum Corporation Price, Consensus and EPS Surprise
Marathon Petroleum Corporation price-consensus-eps-surprise-chart | Marathon Petroleum Corporation Quote
Inside MPC’s Segments
Refining & Marketing: The Refining & Marketing segment reported an operating income of $1.3 billion, which fell 42.3% from the year-ago profit of $2.3 billion. The drop primarily reflects lower year-over-year margins, partly offset by an increase in capacity utilization.
Specifically, the refining margin of $17.37 per barrel declined from $22.10 a year ago. But capacity utilization during the quarter was 97%, up from 93% in the corresponding period of 2023.
Meanwhile, total refined product sales volumes were 3,742 thousand barrels per day (mbpd), down from 3,581 mbpd in the year-ago quarter. But throughput rose from 2,925 mbpd in the year-ago quarter to 3,065 mbpd and outperformed the Zacks Consensus Estimate of 2,968 mbpd.
MPC’s operating costs per barrel decreased from $5.15 in the year-ago quarter to $4.97.
Midstream: This unit mainly reflects Marathon Petroleum’s general partner and majority limited partner interests in MPLX LP (MPLX) — a publicly traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.
Segment profitability was $1.3 billion, up 6.2% from the second quarter of 2023. Earnings were buoyed up by higher rates and volumes processed, together with contribution from acquired assets.
Financial Analysis
Marathon Petroleum reported expenses of $35.8 billion in second-quarter 2024, up 6.9% from the year-ago quarter.
In the reported quarter, Marathon Petroleum spent $569 million on capital programs (53% on Refining & Marketing and 42% on the Midstream segment) compared to $562 million in the year-ago period.
As of Jun 30, the Zacks Rank #4 (Sell) company had cash and cash equivalents of $4.4 billion and total debt, including that of MPLX, of $28.9 billion, with a debt-to-capitalization of 50.9%.
In the second quarter, MPC repurchased $2.9 billion of shares and a further $900 million worth of shares in July. The company currently has a remaining authorization of $5.8 billion.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Important Energy Earnings So Far
While we have discussed Marathon Petroleum’s second-quarter result in detail, let’s take a look at some other key energy reports of this season.
Oil service biggie Halliburton (HAL - Free Report) reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets. Meanwhile, revenues of $5.8 billion were $35 million higher than the corresponding period of 2023 but missed the Zacks Consensus Estimate of $6 billion due to weak performance in the North American region.
Halliburton reported second-quarter capital expenditure of $347 million, higher than our projection of $303 million. As of Jun 30, 2024, the company had approximately $2.1 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth its stock during the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to free cash flow of $793 million.
ConocoPhillips (COP - Free Report) , one of the world’s largest independent oil and gas producers, reported second-quarter 2024 adjusted earnings per share of $1.98, missing the Zacks Consensus Estimate of $2.06. The bottom line, however, improved from the prior-year quarter’s $1.84 per share. ConocoPhillips’ higher costs and expenses led to a weaker-than-expected bottom line. The negatives were partially offset by strong oil equivalent production volumes — up 7.8% year over year.
As of Jun 30, 2024, ConocoPhillips had $4.3 billion in cash and cash equivalents. COP’s total long-term debt was $17 billion, while it had a short-term debt of $1.3 billion. Capital expenditure and investments totaled $3 billion. Net cash provided by operating activities was $4.9 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported second-quarter 2024 adjusted earnings of $2.71 per share, which beat the Zacks Consensus Estimate of $2.61, driven by an increase in refining throughput volumes. Adjusted operating income in the Refining segment totaled $1.2 billion, down from $2.4 billion in the year-ago quarter. The figure also missed our estimate of $2.1 billion.
Valero’s total cost of sales increased to $33.1 billion from the year-ago figure of $31.5 billion. The figure is also above our estimate of $31.3 billion, primarily due to higher material costs. The second-quarter capital investment totaled $420 million, of which $329 million was allotted for sustaining the business.