Marathon Petroleum’s 1Q18 Earnings Miss Estimates



Marathon Petroleum’s 1Q18 expected versus actual performance

Marathon Petroleum (MPC) posted its 1Q18 results on April 30. The company posted 1Q18 revenues of $19 billion, which missed Wall Street analyst estimates. MPC’s reported EPS for 1Q18 stood at $0.08. However, MPC’s adjusted EPS stood at $0.04, which missed the estimated EPS of $0.15. Also, the company’s 1Q18 EPS came in 33% lower than its 1Q17 adjusted EPS.

Along with announcing its 1Q18 results, Marathon Petroleum announced the acquisition of Andeavor (ANDV). The acquisition would create the largest downstream company in the United States, which would generate vast operational synergies. For more on this, read Marathon Petroleum to Acquire Andeavor: ANDV Opens 10% Higher.

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Marathon Petroleum’s 1Q18 earnings

Marathon Petroleum’s reported net income attributable to shareholders rose from $30 million in 1Q17 to $37 million in 1Q18. This increase was due to a rise in the Midstream segment’s operating income. However, MPC’s operating earnings in its Refining and Speedway (or Retail) segments fell. Also, in 1Q18, deferred tax benefits stood at $20 million due to strategic transactions in the company.

MPC’s refining margins fell leading to a loss in its Refining segment in the first quarter. Also, the Speedway segment’s operating income fell 30% YoY in 1Q18. However, the Midstream segment’s earnings rose 83% YoY in 1Q18.

Peers’ performance

MPC’s peers have posted year-over-year rises in earnings in 1Q18. Valero Energy (VLO) posted 47% higher EPS YoY in 1Q18. Also, Phillips 66’s (PSX) 1Q18 EPS stood a whopping 86% higher than its 1Q17 adjusted EPS.

HollyFrontier (HFC) is estimated to post positive EPS in 1Q18 compared to negative EPS in 1Q17. Also, PBF Energy (PBF) and Delek US Holdings (DK) are expected to post smaller losses in 1Q18 compared to larger losses in 1Q17.


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