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Western Refining Beats Q3 Earnings on Higher Throughput

Oil refiner and marketer Western Refining Inc.WNR reported strong third-quarter 2015 earnings on the back of higher throughput volumes and lower operating expenses. Shares of the company gained nearly 5% following the beat.

The company's earnings per share (excluding special items) came in at $1.69, which surpassed the Zacks Consensus Estimate of $1.57. However, the bottom line decreased from the year-ago adjusted figure of $1.73 per share on lower refining margins.

Western Refining Inc. (WNR) - Earnings Surprise | FindTheCompany

Quarterly net sales of $2,569.1 million beat the Zacks Consensus Estimate of $2,257 million but were 36.6% lower than the year-ago quarter level.

Refining Segment: Analysis

Throughput: Total refining throughput averaged 164,580 barrels per day (Bbl/d), up from 158,580 Bbl/d in the year-ago quarter. Overall, throughput volumes at the El Paso refinery increased 6.3% year over year to 138,916 Bbl/d. The Gallup unit, on the other hand, recorded throughput volumes of 25,664 Bbl/d, down 7.6% from the year-earlier level.

Refining Margins: Gross refining margin recorded a year-over-year decline from $24.04 to $21.11 per barrel. Geographically, refining margin decreased 11.8% to $18.51 per barrel at El Paso but increased nearly 12% to $23.08 per barrel at Gallup.

Operating Expenses: Direct operating expenses at El Paso averaged $3.64 per barrel, 15.7% lower year over year. However, direct operating expenses at Gallup increased about 10% year over year to $9.10 per barrel. Combined direct operating expenses at Western Refining's units were $5.10 per barrel for the three months ended Sep 30, 2015. This is lower than $5.36 per barrel recorded in the year-ago period.

Capital Expenditure & Balance Sheet

Headquartered in El Paso, TX, Western Refining's total capital spending during the quarter was $76.4 million, much higher than $50 million in the third quarter of 2014. As of Sep 30, 2015, Western Refining had cash and cash equivalents of $709.6 million and total debt of approximately $1,595.7 million. This represents a debt-to-capitalization ratio of 34.5%.

Dividend & Share Repurchases

So far in 2015, the company has returned roughly $234 million to its shareholders through dividends and share repurchases.

Zacks Rank and Other Key Picks

Western Refining currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the oil refining and marketing space are Tesoro Corporation TSO , Murphy USA Inc. MUSA and Galp Energia SGPS SA GLPEY . All these stocks hold a Zacks Rank #2 (Buy).

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TESORO CORP (TSO): Free Stock Analysis Report

WESTERN REFING (WNR): Free Stock Analysis Report

MURPHY USA INC (MUSA): Free Stock Analysis Report

GALP ENERGIA SA (GLPEY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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