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Shares of Blue Dolphin Energy Company (BDCO - Free Report) have demonstrated a strong recovery, gaining 12.2% since reporting third-quarter 2024 earnings. The stock significantly outperformed the S&P 500 index’s 1.5% decline over the same period. Over the past month, BDCO shares have risen 26.1% compared with the S&P 500 index’s 1.2% increase.
Q3 Revenues & Earnings Performance
For the third quarter of 2024, Blue Dolphin reported total revenues of $82.1 million, down 19.9% from $102.6 million in the same quarter of 2023.
The company posted a net loss of $5 million or 34 cents per share against a net income of $7.1 million or $0.47 per share in the year-ago quarter.
The decrease was primarily attributed to less favorable refining margins and lower sales volumes, reflecting a challenging market environment.
Blue Dolphin Energy Co. Price, Consensus and EPS Surprise
Refinery Operations: The adjusted refinery operations segment reported a deficit of $4 million for the third quarter of 2024, a sharp decline from a margin of $9.7 million in the year-ago quarter. This was attributed to inventory impairments of $1.9 million, resulting from the valuation of inventory at the lower of cost or net realizable value, along with a decline in refining margins.
Tolling & Terminaling: This segment reported a margin of $0.1 million for the third quarter of 2024, down from $0.2 million in the third quarter of 2023. Decreased revenues from tolling and terminaling contributed to the reduced performance.
Management Commentary
Blue Dolphin's gross margin for the third quarter declined significantly due to adverse market conditions. The company reported a total cost of operations of $86.9 million, exceeding its revenues of $82.1 million. This resulted in a gross deficit, with higher input costs and inventory impairments weighing heavily on profitability.
The operating margin was negative for the reported quarter as Blue Dolphin incurred a loss of $4.8 million from operations against an operating profit of $8.9 million in the prior-year period.
The net margin for the third quarter was -6.1%, reflecting a net loss of $5 million against revenues of $82.1 million. This is a stark contrast to a positive net margin of 6.9% in the same quarter of 2023.
Liquidity & Guidance
As of Sept. 30, 2024, Blue Dolphin reported $1.7 million in cash and cash equivalents, and restricted cash, a sharp decline from $18.7 million at the end of 2023. However, the company improved its working capital position significantly. It reported $9.9 million in working capital against a deficit of $6.1 million at the end of 2023.
Factors Influencing Headline Numbers
The company faced a combination of macroeconomic and operational challenges during the quarter. Key factors included:
Lower Refining Margins: Blue Dolphin cited unfavorable market conditions, including weak pricing dynamics for refined products.
Inventory Buildup: Inventory accumulation during low-margin periods and limited customer opportunities in export markets pressured working capital and profitability.
Maintenance Costs: Costs related to the turnaround of refinery equipment further constrained margins.
Other Developments
In the quarter, Blue Dolphin continued addressing regulatory and operational challenges, including decommissioning offshore assets mandated by regulatory authorities. The company’s efforts to resolve compliance issues and reduce liabilities reflect its broader strategy to enhance operational and financial flexibility.
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Blue Dolphin Q3 Earnings & Revenues Decline Y/Y Amid Weaker Margins
Shares of Blue Dolphin Energy Company (BDCO - Free Report) have demonstrated a strong recovery, gaining 12.2% since reporting third-quarter 2024 earnings. The stock significantly outperformed the S&P 500 index’s 1.5% decline over the same period. Over the past month, BDCO shares have risen 26.1% compared with the S&P 500 index’s 1.2% increase.
Q3 Revenues & Earnings Performance
For the third quarter of 2024, Blue Dolphin reported total revenues of $82.1 million, down 19.9% from $102.6 million in the same quarter of 2023.
The company posted a net loss of $5 million or 34 cents per share against a net income of $7.1 million or $0.47 per share in the year-ago quarter.
The decrease was primarily attributed to less favorable refining margins and lower sales volumes, reflecting a challenging market environment.
Blue Dolphin Energy Co. Price, Consensus and EPS Surprise
Blue Dolphin Energy Co. price-consensus-eps-surprise-chart | Blue Dolphin Energy Co. Quote
Segment Performance
Refinery Operations: The adjusted refinery operations segment reported a deficit of $4 million for the third quarter of 2024, a sharp decline from a margin of $9.7 million in the year-ago quarter. This was attributed to inventory impairments of $1.9 million, resulting from the valuation of inventory at the lower of cost or net realizable value, along with a decline in refining margins.
Tolling & Terminaling: This segment reported a margin of $0.1 million for the third quarter of 2024, down from $0.2 million in the third quarter of 2023. Decreased revenues from tolling and terminaling contributed to the reduced performance.
Management Commentary
Blue Dolphin's gross margin for the third quarter declined significantly due to adverse market conditions. The company reported a total cost of operations of $86.9 million, exceeding its revenues of $82.1 million. This resulted in a gross deficit, with higher input costs and inventory impairments weighing heavily on profitability.
The operating margin was negative for the reported quarter as Blue Dolphin incurred a loss of $4.8 million from operations against an operating profit of $8.9 million in the prior-year period.
The net margin for the third quarter was -6.1%, reflecting a net loss of $5 million against revenues of $82.1 million. This is a stark contrast to a positive net margin of 6.9% in the same quarter of 2023.
Liquidity & Guidance
As of Sept. 30, 2024, Blue Dolphin reported $1.7 million in cash and cash equivalents, and restricted cash, a sharp decline from $18.7 million at the end of 2023. However, the company improved its working capital position significantly. It reported $9.9 million in working capital against a deficit of $6.1 million at the end of 2023.
Factors Influencing Headline Numbers
The company faced a combination of macroeconomic and operational challenges during the quarter. Key factors included:
Lower Refining Margins: Blue Dolphin cited unfavorable market conditions, including weak pricing dynamics for refined products.
Inventory Buildup: Inventory accumulation during low-margin periods and limited customer opportunities in export markets pressured working capital and profitability.
Maintenance Costs: Costs related to the turnaround of refinery equipment further constrained margins.
Other Developments
In the quarter, Blue Dolphin continued addressing regulatory and operational challenges, including decommissioning offshore assets mandated by regulatory authorities. The company’s efforts to resolve compliance issues and reduce liabilities reflect its broader strategy to enhance operational and financial flexibility.