Ohio-based independent oil refiner and marketer
Marathon Petroleum Corporation
) reported an impressive first quarter of 2013 backed by
favorable market conditions and increased earnings in all its
segments. These were partially offset by lower refining margins.
Marathon reported earnings per share of $2.17, in line with the
Zacks Consensus Estimate.
Compared with the year-ago period, Marathon's per share earnings
improved considerably (from $1.70 to $2.17) - on the back of
increased revenue and higher fuel margins in the Speedway
Revenues at $23.3 billion were up 15.1% year over year and above
the Zacks Consensus Estimate of $20.6 billion.
Refining & Marketing:
Margins in the refining business decreased from the year-earlier
Marathon's refining and marketing unit earned $1.1 billion during
the quarter, compared with $0.9 billion in the year-ago quarter -
reflecting higher production and sales volume.
This was partially offset by lower realized gross refining and
marketing margin that was down by 5.3% year over year to $7.92
per barrel. Total refined product sales volumes increased (by
22.7%) from the year-earlier level to 1,880 thousand barrels per
day, while throughput improved 26.6% year over year to 1,671
thousand barrels per day.
Income from the Speedway retail stations totaled $67 million, up
from $50 million in the year-ago period. The growth was driven by
increased gasoline and distillate gross margin as well as higher
merchandise gross margin, partially offset by high expenses
related to the increased number of stores.
Segment profitability for the most recent quarter was $51 million
which increased 21.4% from the first quarter of 2012. Higher
pipeline affiliate earnings and increased transportation tariffs
aided the growth.
Capital Expenditure & Balance Sheet
During the quarter, Marathon spent $1.6 billion on capital
programs (90.2% on Refining). As of Mar 31, 2013, the company had
cash and cash equivalents of $4.7 billion and total debt of $3.4
billion, with a debt-to-capitalization ratio of 22%.
For its quarter ended Mar 31, Marathon returned about $547
million to shareholders by way of dividend and share repurchase
On Apr 24, 2013, Marathon's board of directors declared a
quarterly common stock dividend of 35 cents per share ($1.40 per
share annualized). The dividend will be paid on Jun 10, to
shareholders of record as of May 16.
GLOBAL PARTNERS (GLP): Free Stock Analysis
LEHIGH GAS PTNR (LGP): Free Stock Analysis
MARATHON PETROL (MPC): Free Stock Analysis
INERGY LP (NRGY): Free Stock Analysis Report
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The company currently retains a Zacks Rank #2 (Buy), implying
that it is expected to outperform the broader U.S. equity market
over the next 1 to 3 months.
In addition to Marathon, there are other oil refiners and
marketers that are expected to perform well in the coming 1 to 3
months. These include
Lehigh Gas Partners LP
) with Zacks Rank #1 (Strong Buy), and
Global Partners LP
) with Zacks Rank #2 (Buy).