Andeavor’s Q2 2018 estimated and actual performance
Andeavor (ANDV) posted its Q2 2018 results on August 6 after the market closed. ANDV reported revenues of $12.5 billion, which surpassed Wall Street analysts’ estimate. Also, the company’s Q2 2018 adjusted EPS of $3.53 surpassed the estimated EPS of $3.00. Its Q2 2018 adjusted EPS stood 102% higher than its Q2 2017 adjusted EPS.
Andeavor stock could see a positive impact due to its Q2 2018 earnings beat. Marathon Petroleum’s (MPC) acquisition of ANDV could close on October 1, subject to requisite approval.
Andeavor’s Q2 2018 earnings review
Andeavor’s net earnings attributable to its shareholders rose from $40 million in Q2 2017 to $515 million in Q2 2018. The total included $30 million on costs associated with the integration of Western Refining and transaction costs related to the strategic combination with MPC.
ANDV’s operating income increased 125% YoY to $1,009 million in the second quarter due to a YoY rise in operating income in the Refining and the Logistics segments, partially offset by a YoY fall in operating income from the Marketing segment.
The Refining segment’s operating earnings rose from $45 million in Q2 2017 to $607 million in Q2 2018. This rise was on account of expansion in refining margin and higher throughputs. ANDV’s gross refining margin rose by 51% YoY to $14.3 per barrel in Q2 2018.
The Logistics segment’s operating income grew by 18% YoY to $193 million in Q2 2018 mainly due to dropdowns, the integration of Western Refining logistics assets, and organic growth activities. However, ANDV’s marketing segment’s operating income fell by 13% over Q2 2017 to $209 million in Q2 2018.