How Western Refining’s Stock Performed after the Release of Its 1Q16 Earnings



Western Refining’s stock fell by 8.6%

Western Refining (WNR) announced its earnings results on May 3, 2016, before markets opened. WNR’s stock opened at $25.4 per share, lower than the previous day’s close of $26.7. It saw a high of $25.9 and a low of $24.2 on May 3 and eventually closed at $24.4—about 8.6% lower than its previous day’s close.

How Western Refining's Stock Performed after the Release of Its 1Q16 Earnings

That same day, peers Alon USA Energy (ALJ), Delek US Holdings (DK), and Tesoro (TSO), fell by 5.8%, 5.4%, and 2.9%, respectively.

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Western Refining’s capex position

In 1Q16, Western Refining (WNR) incurred capex (capital expenditure) of $79 million. Of that amount, $44.8 million was in its Western segment, whereas $28 million was in its NTI (Northern Tier Energy Partners’ Refining, Transport, and Retail operations) segment, and $6.2 million was in its WNRL (Western Refining Logistics Operations) segment.

WNR has lowered its capex guidance for 2016 to $304 million, of which $149 million is likely to be spent on discretionary projects. WNR expects its merger transaction with Northern Tier Energy (NTI) to close in 2Q16. The merger is expected to enhance WNR’s refining capacity and create more than $10 million of operational synergies for the merged entity.

According to WNR management, “The second quarter has started off well as gasoline demand remains strong and southwest US gasoline margins have recovered from their lows in February.” WNR’s management also stated that the company will “continue to be focused on a balanced approach of disciplined capital investments, returning cash to shareholders, and managing our balance sheet.”

In the next and final part of this series, we’ll see what analysts are recommending for Western Refining.


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