Andeavor’s stock performance
Andeavor (ANDV) announced its 4Q17 results on February 15, 2018, after the market closed. Let’s look at how Andeavor stock performed the next day.
On February 16, ANDV opened at $98.2 per share, below its previous close of $99.1. Andeavor saw a high of $98.9 and a low of $94.7 during the day and eventually closed at $96.2, ~2.9% lower than its previous day’s close but in line with a few of its peers.
ANDV’s peer Phillips 66 (PSX), HollyFrontier (HFC), and Delek US Holdings (DK) saw their stock prices fall 0.8%, 0.9%, and 0.8%, respectively, on the day. However, Marathon Petroleum (MPC) rose a marginal 0.2% on the day. Also, Valero Energy (VLO) rose slightly by 0.3% on February 16.
In comparison, on February 16, 2018, crude oil prices rose 0.6%. However, on the day, the SPDR S&P 500 ETF (SPY), the broader market indicator, closed almost flat.
Andeavor’s 4Q17 update
In 4Q17, Andeavor incurred capital expenditure (capex) of $462 million, of which $294 million went toward the Refining segment and $84 million went toward the Logistics segment. Andeavor aims to strengthen its midstream MLP, Andeavor Logistics (ANDX), via both organic (optimal capex) and inorganic (dropdowns, acquisitions) paths. Andeavor expects to incur capex of $1.5 billion in 2018, of which $1.1 billion will go toward Andeavor and $0.43 billion will go toward ANDX.
The integration of Western Refining has generated $190 million worth of synergies on an annual run-rate basis in 2017. ANDV expects ~$350 million–$425 million in annual savings in the form of operational synergies by June 2019.
In the company’s 4Q17 earnings release, its chair and CEO, Greg Goff, stated, “We are excited about the opportunities we see in our business to increase gross margin, improve productivity and deliver synergies from our acquisitions, which support our plan to generate $9 to $12 billion of cash over the next three years, inclusive of the benefits from tax reform. Additionally, we also see the potential for significant opportunities from IMO 2020. As always, we remain focused on disciplined capital allocation that delivers the most value to our shareholders.”