Oil refiner and marketer,
Western Refining Inc.
) reported better-than-expected first-quarter 2014 results,
before the opening bell yesterday. Increased throughput volumes
aided the outcome.
The company reported earnings per share (excluding special items)
of 44 cents, surpassing the Zacks Consensus Estimate of 41 cents.
The bottom line, however, plummeted 53.2% from the year-ago
quarter's adjusted per share profit of 94 cents. Significant fall
in refining margins prompted the decline.
Quarterly net sales of $3.73 billion beat the Zacks Consensus
Estimate of $2.43 billion. The top line also increased 71.0% from
the year-ago quarter's figure of $2.18 billion.
The better-than-expected results were reflected in the opening
price of Western Refining yesterday. The company opened at $44.71
per share, reflecting a 2.7% hike from the closing price on May
5. The per share price, however, fell to $42.59 at the close of
trading on Tuesday.
Refining Segment: Analysis
The total refining throughput averaged 137,486 barrels per day
(Bbl/d), up from 122,373 Bbl/d in the year-ago quarter. Overall,
throughput volumes at the El Paso refinery increased 11.4% year
over year to 109,140 Bbl/d and the Gallup unit recorded
throughput volumes of 28,346 Bbl/d, up 16.0% from the
Gross refining margin (excluding activities related to hedging)
was down 53.3% year over year at $15.47 per barrel.
Geographically, refining margin fell 54.4% to $15.78 per barrel
at El Paso and was down 49.4% at $13.56 per barrel at
Direct operating expenses at El Paso during the quarter averaged
$4.89 per barrel, down 19.8% year over year.
Direct operating expenses at Gallup decreased 16.2% year over
year to $8.44 per barrel.
Direct operating expenses at Western Refining's units were $5.88
per barrel for the three months ended Mar 31, 2014, down from
$7.43 in the corresponding period a year ago.
Capital Expenditure & Balance Sheet
El Paso, TX-headquartered Western Refining's total capital
spending during the quarter was $50.6 million, lower than $65.6
million in the first quarter of 2013. As of Mar 31, 2014, Western
Refining had cash and cash equivalents of $431.6 million and
total debt of approximately $1,413.6 million, representing a
debt-to-capitalization ratio of 34.7%.
Zacks Rank & Other Picks
Western Refining currently retains a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
Meanwhile, one can look at better-ranked players in the oil
refining and marketing industry like
NGL Energy Partners LP
Sprague Resources LP
Valero Energy Corporation
). All these stocks sport a Zacks Rank #2 (Buy).
NGL ENERGY PART (NGL): Free Stock Analysis
SPRAGUE RESRCS (SRLP): Free Stock Analysis
VALERO ENERGY (VLO): Free Stock Analysis
WESTERN REFING (WNR): Free Stock Analysis
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