A Marathon Petroleum refinery in Detroit, Mich., on Sept. 9.Rebecca Cook/Reuters
Top U.S. refiner Marathon Petroleum MPC-N reported a third-quarter profit on Tuesday that beat Wall Street estimates on better-than-expected refining throughput and utilization rates.
The company’s shares rose 2.1 per cent to $147.93.
Marathon also approved an additional $5-billion share repurchase program, and now has $8.5-billion available under its share buyback authorization.
The refiner’s crude capacity utilization in the third quarter was about 94 per cent, higher than the 90 per cent it forecast in August. Total throughput, or the amount of crude processed through refineries, of 3 million barrels per day (bpd) was also above the company’s prior expectation of 2.84 million bpd.
For the fourth quarter, Marathon forecast total refinery throughput of 2.88 million bpd.
“EPS beat by a wide margin on higher-than-guided throughput. Q3 repurchases came in above consensus expectations,” TD Cowen analyst Jason Gabelman said.
Marathon earned $1.87 per share in the third quarter, compared with the average analyst estimate of 98 cents, according to data compiled by LSEG.
The company performed better than forecast on distribution costs, refinery turnarounds, and throughputs, which totaled about a $202-million tailwind versus the brokerage’s modeling, Tudor, Pickering, Holt & Co analyst Matthew Blair said.
Adjusted core earnings at Marathon’s midstream unit rose 5.8 per cent to $1.6-billion in the third quarter, primarily driven by higher rates and volumes transported.
Marathon joined rivals such as Valero Energy and Phillips 66 in beating analysts’ estimates, but posting a drop in income.
Global oil refiners are experiencing a decline in profitability, marking a downturn for an industry that had previously thrived in the post-pandemic period, highlighting the slowdown in global demand, especially in China.
Marathon said its third-quarter refining and marketing margin was $14.35 per barrel, compared with $26.16 per barrel a year earlier.
Net income attributable to the company in the third quarter dropped 82 per cent to $622-million, from last year.
