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Marathon Petroleum Kick-Starts Earnings Season with a Beat

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Marathon Petroleum Kick-Starts Earnings Season with a Beat PART 1 OF 5

Marathon Petroleum’s 3Q17 Earnings Beat Estimates

Expected versus actual performance

Marathon Petroleum (MPC) posted its 3Q17 results on October 26, 2017. Before we look at its earnings, let’s examine MPC’s 3Q17 performance compared to the estimates.

In 3Q17, Marathon Petroleum posted revenues of $19.4 billion, which surpassed Wall Street analysts’ estimates. Reported EPS (earnings per share) for 3Q17 was $1.80, which exceeded the estimate of $1.50. EPS was three times higher than adjusted EPS in 3Q16.

Marathon Petroleum’s 3Q17 Earnings Beat Estimates

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3Q17 earnings

Marathon Petroleum’s reported net income attributable to its shareholders rose from $145.0 million in 3Q16 to $903.0 million in 3Q17. That was due to the rise in its operating income for the Refining and Marketing segment and the Midstream segment. MPC’s operating earnings in its Speedway (or retail) segment remained constant.

MPC’s refining margins rose, leading to a whopping 335.0% YoY (year-over-year) rise in refining earnings in the third quarter. It was mainly due to the impact of Hurricane Harvey. The Midstream segment’s earnings rose 15.0% YoY in 3Q17. However, the Speedway segment’s operating income remained unchanged at $209.0 million in 3Q17. We’ll look at MPC’s segmental 3Q17 performance in the next part of this series.

MPC’s peer Valero Energy (VLO) posted 54.0% higher EPS in 3Q17 compared to 3Q16. EPS for Andeavor (ANDV), Phillips 66 (PSX), and HollyFrontier (HFC) are expected to rise 128.0%, 49.0%, and 135.0%, respectively, YoY in 3Q17. PBF Energy (PBF) and Delek US Holdings (DK) are expected to post positive earnings in 3Q17 compared to losses in 3Q16.

In the next part of this series, we’ll do a segmental analysis of Marathon Petroleum’s 3Q17 results.

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