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Tesoro Corporation (TSO) Q4 Earnings and Revenue Beat
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Independent refiner Tesoro Corporation reported fourth-quarter 2016 adjusted loss from continuing operations of 2 cents per share, which surpassed the Zacks Consensus Estimate of loss of 18 cents. Significant contribution from the logistics segment supported the results. The bottom line, however, deteriorated from the year-ago quarter figure of $1.83 per share.
Tesoro Corporation reported quarterly revenues of $6,652 million as against $6,273 million in the comparable quarter last year. Also, the top line surpassed the Zacks Consensus Estimate of $6,573 million.
Segmental Analysis
Refining: The segment posted operating income of $43 million compared with $12 million in the year-earlier quarter. Increase in refining margins improved the quarterly result.
Logistics: During the fourth quarter, this segment generated operating profit of $123 million compared with $97 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 Northern California Terminalling and Storage Assets and the Alaska Storage and Terminalling Assets completed in 2016.
Marketing: The segment earned $169 million compared with $175 million in the fourth quarter of 2015.
Throughput
Total refining throughput averaged 841 thousand barrels per day (MBbl/d) as against 807 MBbl/d in the prior-year quarter.
Overall, throughput volumes in California (consisting of Martinez and Los Angeles refineries) rose from 490 MBbl/d to 521 MBbl/d, on a year-over-year basis. Throughput in Tesoro Corporation's Pacific Northwest (Alaska and Washington) operations increased to 189 MBbl/d from 177 MBbl/d in the year-ago comparable quarter. Moreover, throughput volumes in the Mid-Continent (North Dakota and Utah) decreased to 131 MBbl/d from 140 MBbl/d in the year-ago comparable quarter.
Refining Margins
Gross refining margin increased 4.4% year over year to $9.45 per barrel.
Tesoro Corporation Price, Consensus and EPS Surprise
Region-wise, refining margin decreased almost 6.9% to $10.74 per barrel in California, was down 13.6% to $7.58 per barrel in the Mid-Continent and rose more than 191.7% to $7.13 per barrel in Pacific Northwest, all on a year-over-year basis.
Realized Costs & Prices
Manufacturing costs before depreciation and amortization decreased 3% from the year-earlier level to $5.43 per barrel.
Total refined product sales averaged 993 Mbbl/d as against 984 Mbbl/d in the fourth quarter of 2015.
Operating Cost
Tesoro Corporation's operating costs in the reported quarter were $680 million compared with $649 million in the fourth quarter of 2015.
Capital Expenditure & Balance Sheet
Tesoro Corporation's total capital spending in the reported quarter (including TLLP) totaled $324 million.
As of Dec 31, 2016, the company had $3,295 million of cash and cash equivalents and long-term debt (excluding TLLP) of $2.9 billion, representing a debt-to-capitalization ratio of 35%.
Guidance
Tesoro Corporation expects throughput margin for the first quarter between 800 MBbl/d and 850 MBbl/d.
Zacks Rank
Tesoro Corporation currently carries a Zacks Rank #3 (Hold).
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
In the last quarter, McDermott posted a positive earnings surprise of 250.00%.
In the last quarter, Suncor posted a positive earnings surprise of 300.00%.
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Tesoro Corporation (TSO) Q4 Earnings and Revenue Beat
Independent refiner Tesoro Corporation reported fourth-quarter 2016 adjusted loss from continuing operations of 2 cents per share, which surpassed the Zacks Consensus Estimate of loss of 18 cents. Significant contribution from the logistics segment supported the results. The bottom line, however, deteriorated from the year-ago quarter figure of $1.83 per share.
Tesoro Corporation reported quarterly revenues of $6,652 million as against $6,273 million in the comparable quarter last year. Also, the top line surpassed the Zacks Consensus Estimate of $6,573 million.
Segmental Analysis
Refining: The segment posted operating income of $43 million compared with $12 million in the year-earlier quarter. Increase in refining margins improved the quarterly result.
Logistics: During the fourth quarter, this segment generated operating profit of $123 million compared with $97 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 Northern California Terminalling and Storage Assets and the Alaska Storage and Terminalling Assets completed in 2016.
Marketing: The segment earned $169 million compared with $175 million in the fourth quarter of 2015.
Throughput
Total refining throughput averaged 841 thousand barrels per day (MBbl/d) as against 807 MBbl/d in the prior-year quarter.
Overall, throughput volumes in California (consisting of Martinez and Los Angeles refineries) rose from 490 MBbl/d to 521 MBbl/d, on a year-over-year basis. Throughput in Tesoro Corporation's Pacific Northwest (Alaska and Washington) operations increased to 189 MBbl/d from 177 MBbl/d in the year-ago comparable quarter. Moreover, throughput volumes in the Mid-Continent (North Dakota and Utah) decreased to 131 MBbl/d from 140 MBbl/d in the year-ago comparable quarter.
Refining Margins
Gross refining margin increased 4.4% year over year to $9.45 per barrel.
Tesoro Corporation Price, Consensus and EPS Surprise
Tesoro Corporation Price, Consensus and EPS Surprise | Tesoro Corporation Quote
Region-wise, refining margin decreased almost 6.9% to $10.74 per barrel in California, was down 13.6% to $7.58 per barrel in the Mid-Continent and rose more than 191.7% to $7.13 per barrel in Pacific Northwest, all on a year-over-year basis.
Realized Costs & Prices
Manufacturing costs before depreciation and amortization decreased 3% from the year-earlier level to $5.43 per barrel.
Total refined product sales averaged 993 Mbbl/d as against 984 Mbbl/d in the fourth quarter of 2015.
Operating Cost
Tesoro Corporation's operating costs in the reported quarter were $680 million compared with $649 million in the fourth quarter of 2015.
Capital Expenditure & Balance Sheet
Tesoro Corporation's total capital spending in the reported quarter (including TLLP) totaled $324 million.
As of Dec 31, 2016, the company had $3,295 million of cash and cash equivalents and long-term debt (excluding TLLP) of $2.9 billion, representing a debt-to-capitalization ratio of 35%.
Guidance
Tesoro Corporation expects throughput margin for the first quarter between 800 MBbl/d and 850 MBbl/d.
Zacks Rank
Tesoro Corporation currently carries a Zacks Rank #3 (Hold).
Some better-ranked players from the broader energy sector include Braskem S.A. (BAK - Free Report) , McDermott International, Inc. and Suncor Energy Inc. (SU - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
In the last quarter, McDermott posted a positive earnings surprise of 250.00%.
In the last quarter, Suncor posted a positive earnings surprise of 300.00%.
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In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>