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Delek (DK) Q2 Loss Narrower Than Expected, Sales Decline Y/Y
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Delek US Holdings, Inc. (DK - Free Report) reported second-quarter 2024 adjusted net loss of 92 cents per share, narrower than the Zacks Consensus Estimate of a loss of $1.42, owing to lower year-over-year operating costs. However, the figure deteriorated from the year-ago quarter’s profit of $1 per share. The loss was due to the Refining and Retail segment's weak year-on-year contributions.
Net revenues decreased 18.4% year over year to $3.4 billion. However, the figure beat the Zacks Consensus Estimate of $3.1 billion, driven by strong contributions from the Logistics segment.
The diversified downstream energy company’s adjusted EBITDA came in at $107.5 million compared with $259.4 million in the year-ago period.
On Jul 31, DK’s board of directors approved a 2% increase in regular dividends, bringing the quarterly payout to 25.5 cents per share. The dividend will be paid out on Aug 19, 2024, to its shareholders of record as of Aug 12.
Delek US Holdings, Inc. Price, Consensus and EPS Surprise
Refining: The segment's adjusted EBITDA was $42.1 million, indicating a decline from the prior-year quarter's profit of $212.4 million. This significant year-over-year decline was due to lower refining crack spreads. In the second quarter of 2024, DK's benchmark crack spreads fell by an average of 21.2% from prior-year levels. Additionally, the reported figure missed our estimate of $78.8 million.
Logistics: This unit represents Delek’s majority interest in Delek Logistics Partners, L.P. — a publicly traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.
In the second quarter, the segment registered an adjusted EBITDA of $100.6 million compared with $90.9 million in the year-ago quarter. However, the figure missed our projection of $105.6 million. The year-over-year growth can be attributed to the robust contributions from the Delaware Gathering systems and annual rate hikes.
Retail: The segment registered an adjusted EBITDA of $12.4 million in the last reported quarter compared with $15 million in the year-ago period. The year-over-year decline was due to lower sales caused by remodeling activities and reduced margins. However, the figure marginally beat our projection of $12.2 million.
Merchandise sales of $79.6 million declined from the year-ago quarter’s reported figure of $84.3 million. The figure also missed our estimate by 2.7 %. Additionally, the merchandise margin decreased to 32.9% from the year-ago quarter's reported figure of 33.9%.
Oil and gas refining and marketing company’s retail stations sold 43,126 thousand gallons of gasoline compared with 45,687 in the corresponding period of 2023.
Financials
Total operating expenses in the second quarter decreased about 17.8% year over year to $3.37 billion. Delek spent $70.8 million on capital programs in the same time frame.
As of Jun 30, 2024, the company had cash and cash equivalents worth $657.9 million and long-term debt of $2.5 billion, with debt to total capital ratio of about 71.4%.
2024 Guidance
For 2024, the integrated downstream energy company expects capital expenditures of $330 million as it plans to spend $220 million on Refining, $70 million on Logistics (Delek Logistics Partners), $15 million on Retail and $25 million on Corporate & Other.
For the third quarter, the company anticipates operating costs in the band of $205-$215 million, general and administrative expenses in the range of $60-$65 million and depreciation and amortization costs between $90 million and $95 million. It also projects net interest expenses in the $80-$90 million range.
The company anticipates a total crude throughput of 290,000-305,000 barrels per day (bpd) and a total throughput of 301,000-315,000 bpd in the same time frame.
The company expects to process 74,000-77,000 barrels of crude oil per day at its Tyler, TX, refinery in the third quarter. The El Dorado, AR, refinery is expected to process 79,000-82,000 barrels of per day (bpd). The Big Spring, TX, refinery is expected to process 69,000 bpd to 73,000 bpd and the Krotz Springs, LA, refinery is expected to process 79,000 bpd to 83,000 bpd.
Important Q2 Energy Earnings So Far
While we have discussed Delek US Holdings’ second-quarter results in detail, let’s take a look at some other key energy reports of this season.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, 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.
As of Jun 30, 2024, the company reported $2.1 billion in cash and 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 of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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Delek (DK) Q2 Loss Narrower Than Expected, Sales Decline Y/Y
Delek US Holdings, Inc. (DK - Free Report) reported second-quarter 2024 adjusted net loss of 92 cents per share, narrower than the Zacks Consensus Estimate of a loss of $1.42, owing to lower year-over-year operating costs. However, the figure deteriorated from the year-ago quarter’s profit of $1 per share. The loss was due to the Refining and Retail segment's weak year-on-year contributions.
Net revenues decreased 18.4% year over year to $3.4 billion. However, the figure beat the Zacks Consensus Estimate of $3.1 billion, driven by strong contributions from the Logistics segment.
The diversified downstream energy company’s adjusted EBITDA came in at $107.5 million compared with $259.4 million in the year-ago period.
On Jul 31, DK’s board of directors approved a 2% increase in regular dividends, bringing the quarterly payout to 25.5 cents per share. The dividend will be paid out on Aug 19, 2024, to its shareholders of record as of Aug 12.
Delek US Holdings, Inc. Price, Consensus and EPS Surprise
Delek US Holdings, Inc. price-consensus-eps-surprise-chart | Delek US Holdings, Inc. Quote
Segmental Performances
Refining: The segment's adjusted EBITDA was $42.1 million, indicating a decline from the prior-year quarter's profit of $212.4 million. This significant year-over-year decline was due to lower refining crack spreads. In the second quarter of 2024, DK's benchmark crack spreads fell by an average of 21.2% from prior-year levels. Additionally, the reported figure missed our estimate of $78.8 million.
Logistics: This unit represents Delek’s majority interest in Delek Logistics Partners, L.P. — a publicly traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets.
In the second quarter, the segment registered an adjusted EBITDA of $100.6 million compared with $90.9 million in the year-ago quarter. However, the figure missed our projection of $105.6 million. The year-over-year growth can be attributed to the robust contributions from the Delaware Gathering systems and annual rate hikes.
Retail: The segment registered an adjusted EBITDA of $12.4 million in the last reported quarter compared with $15 million in the year-ago period. The year-over-year decline was due to lower sales caused by remodeling activities and reduced margins. However, the figure marginally beat our projection of $12.2 million.
Merchandise sales of $79.6 million declined from the year-ago quarter’s reported figure of $84.3 million. The figure also missed our estimate by 2.7 %. Additionally, the merchandise margin decreased to 32.9% from the year-ago quarter's reported figure of 33.9%.
Oil and gas refining and marketing company’s retail stations sold 43,126 thousand gallons of gasoline compared with 45,687 in the corresponding period of 2023.
Financials
Total operating expenses in the second quarter decreased about 17.8% year over year to $3.37 billion. Delek spent $70.8 million on capital programs in the same time frame.
As of Jun 30, 2024, the company had cash and cash equivalents worth $657.9 million and long-term debt of $2.5 billion, with debt to total capital ratio of about 71.4%.
2024 Guidance
For 2024, the integrated downstream energy company expects capital expenditures of $330 million as it plans to spend $220 million on Refining, $70 million on Logistics (Delek Logistics Partners), $15 million on Retail and $25 million on Corporate & Other.
For the third quarter, the company anticipates operating costs in the band of $205-$215 million, general and administrative expenses in the range of $60-$65 million and depreciation and amortization costs between $90 million and $95 million. It also projects net interest expenses in the $80-$90 million range.
The company anticipates a total crude throughput of 290,000-305,000 barrels per day (bpd) and a total throughput of 301,000-315,000 bpd in the same time frame.
The company expects to process 74,000-77,000 barrels of crude oil per day at its Tyler, TX, refinery in the third quarter. The El Dorado, AR, refinery is expected to process 79,000-82,000 barrels of per day (bpd). The Big Spring, TX, refinery is expected to process 69,000 bpd to 73,000 bpd and the Krotz Springs, LA, refinery is expected to process 79,000 bpd to 83,000 bpd.
Important Q2 Energy Earnings So Far
While we have discussed Delek US Holdings’ second-quarter results in detail, let’s take a look at some other key energy reports of this season.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, 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.
As of Jun 30, 2024, the company reported $2.1 billion in cash and 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 of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.