Marathon Petroleum’s stock performance
Marathon Petroleum (MPC) announced its first-quarter results on May 8. Marathon Petroleum stock opened at $57.9 per share—below the previous day’s close of $59.4. The stock closed at $55.2, which is ~7.1% lower than the previous day’s close. The lower price was likely due to Marathon Petroleum’s lower-than-expected earnings. The broader equity market and peer stocks fell on May 8.
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PBF Energy (PBF) and Delek US Holdings (DK) fell 5.9% and 3.8%, respectively, on May 8. Valero Energy (VLO) fell 2.3% on the same day. On May 8, the SPDR S&P 500 ETF (SPY), which represents the S&P 500 Index, fell 0.1%. However, WTI, the benchmark crude oil, rose 1.2% on May 8.
Marathon Petroleum’s first-quarter update
Marathon Petroleum’s capital expenditure and investments rose from $0.7 billion in the first quarter of 2018 to $1.3 billion in the first quarter. The higher capex was due to the addition of Andeavor’s capex. Among the total capex in the first quarter, $0.4 billion was towards the refining and marketing segments, $0.8 billion was towards the midstream segment, and the rest was towards the retail segment and corporate and others.
Marathon Petroleum continued to return wealth to shareholders in the first quarter. The company expects to return 50% of its discretionary free cash flows to investors through dividends and share repurchases in the coming years. In the first quarter, the company returned $1.239 billion to shareholders, which included dividends and share repurchases.
Due to the expectations for the company’s future quarterly performance, Gary R. Heminger, Marathon Petroleum’s chairman and chief executive officer, in its first-quarter earnings release, said, “Throughout the quarter refining fundamentals improved, gasoline and distillate inventories rebalanced, and the April blended crack spread of $18.80 is more than double the first-quarter average. We expect positive dynamics across all three of our business segments to support growing cash flows throughout the remainder of 2019.”