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Andeavor’s Second-Quarter Earnings Beat Estimates

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Aug. 7 2018, Published 8:12 a.m. ET

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.

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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.

Peers’ performance in Q2 2018

By comparison, Valero Energy (VLO) posted a 75% YoY rise in its EPS in Q2 2018. Also, Marathon Petroleum’s (MPC) Q2 2018 EPS stood 120% higher than its Q2 2017 adjusted EPS. Plus, Phillips 66’s (PSX) Q2 2018 EPS stood a whopping 157% higher than its Q2 2017 adjusted EPS.

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