Marathon Petroleum’s 2Q17 Earnings Missed Estimates



Marathon Petroleum’s performance

Marathon Petroleum (MPC) posted its 2Q17 results on July 27, 2017. Before we proceed with the earnings review, let’s quickly examine the company’s 2Q17 performance versus estimates.

In 2Q17, Marathon Petroleum posted revenues of $18.4 billion, which missed Wall Street analysts’ estimates. Marathon Petroleum’s adjusted EPS (earnings per share) for 2Q17 was $1.03—lower than the estimated EPS of $1.07. The company’s 2Q17 EPS was 4% lower than its 2Q16 adjusted EPS.

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Marathon Petroleum’s 2Q17 earnings

Marathon Petroleum’s reported net income fell from $783 million in 2Q16 to $606 million in 2Q17 due to a decline in the Refining segment’s operating income. The fall was partially offset by an increase in Marathon Petroleum’s operating earnings in its Midstream segment and Speedway, or retail, segment.

Marathon Petroleum’s refining margins fell, which led to 45% lower refining earnings YoY (year-over-year) in the second quarter. However, the Speedway segment’s operating income rose 24% YoY in 2Q17. The Midstream segment’s earnings rose 31% YoY in 2Q17. We’ll discuss Marathon Petroleum’s segmental 2Q17 performance in the next part of this series.

Marathon Petroleum’s peer Valero Energy (VLO) posted 15% higher EPS in 2Q17—compared to 2Q16. Phillips 66 (PSX) is expected to post 7% higher EPS YoY in 2Q17. HollyFrontier (HFC) is expected to post an even a sharper rise in its earnings. Its 2Q17 estimated EPS is ~67% higher than its 2Q16 adjusted EPS. In contrast, Tesoro (TSO) and PBF Energy (PBF) are estimated to post 4% and 85% lower EPS YoY, respectively, in 2Q17.

In the next part, we’ll look at a segmental analysis of Marathon Petroleum’s 2Q17 results.


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