Oil refiner and marketer,
Western Refining Inc.
), reported weak third-quarter 2013 results, owing to significant
decrease in refining margins, partially offset by reduced
operating expenses and higher throughput.
The company reported earnings per share (excluding special items)
of 33 cents, lagging the Zacks Consensus Estimate of 49 cents.
The figure also decreased 66.7% from the year-ago quarter's
adjusted profit of 99 cents.
Quarterly net sales of $2.45 billion failed to beat the Zacks
Consensus Estimate of $2.53 billion. The results also reflected a
nominal decrease of 0.1% from the year-ago quarter.
Refining Segment: Analysis
The total refining throughput averaged 159,622 barrels per day
(Bbl/d), up from 144,198 Bbl/d in the year-ago quarter. Overall,
throughput volumes at the El Paso refinery increased 7.4% year
over year to 133,558 Bbl/d, while the Gallup unit recorded
throughput volumes of 26,064 Bbl/d, up 31.4% from the
Gross refining margin (excluding activities related to hedging)
was down 59.9% year over year to $11.60 per barrel. In terms of
different regions, refining margin was down 59.3% to $11.56 per
barrel at El Paso and down 63.9% to $10.63 per barrel at Gallup.
Direct operating expenses at El Paso during the quarter averaged
$4.35 per barrel, down 16.5% year over year.
Direct operating expenses at Gallup were down 18.8% from the
year-ago period to $8.91 per barrel.
Direct operating expenses at Western Refining's units were $5.64
per barrel for the three months ended Sep 30, 2013, down from
$6.47 per barrel in the year-ago period.
Capital Expenditure & Balance Sheet
El Paso, Texas-headquartered Western Refining's total capital
spending during the quarter was $45.9 million, lower than $71.3
million in the third quarter of 2012. As of Sep 30, 2013, Western
Refining had cash and cash equivalents of $371.1 million and
total debt of approximately $554.5 million, representing a
debt-to-capitalization ratio of 37.7%.
Dividend & Share Repurchase
On Oct 15, 2013, Western Refining announced fourth quarter
dividend of 22 cents per share, representing a 22.2% sequential
hike. The dividend is payable on Nov 14, 2013, to shareholders of
record as of Oct 30, 2013.
Western Refining has repurchased roughly 11.4 million shares from
the start of the share repurchase program, till Oct 25, 2013, for
an average $29.38 per share.
For the fourth quarter of 2013, the total refinery throughput
is anticipated to be approximately 130,000 - 134,000 Bbl/d at the
El Paso refinery and 24,000 - 26,000 Bbl/d at the Gallup
refinery. Western Refining maintains its expected capital
spending for 2013 at $206 million.
MATADOR RESOURC (MTDR): Free Stock Analysis
NORTHRN OIL&GAS (NOG): Free Stock Analysis
VOC ENERGY TRST (VOC): Free Stock Analysis
WESTERN REFING (WNR): Free Stock Analysis
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Western Refining currently retains a Zacks Rank #4 (Sell),
implying that it is expected to underperform the broader U.S.
equity market over the next 1 to 3 months.
However, one can look at better performing energy firms like
Matador Resources Company
Northern Oil and Gas Inc.
VOC Energy Trust
) that offer value. All the stocks sport a Zacks Rank #1 (Strong