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High Refining Margin Buoys HollyFrontier's (HFC) Q4 Earnings

Zacks Equity Research

An Earnings Beat: U.S. refiner HollyFrontier Corporation HFC reported net income per share (excluding special items) of $2.25, beating the Zacks Consensus Estimate of $1.99 and ahead of the year-ago period profit of 70 cents.


Estimate Revision Trend & Surprise History: The stock had seen the Zacks Consensus Estimate for fourth-quarter earnings being revised upward by 3 cents over the last 30 days.


Coming to earnings surprise history, the company has a mixed record: its beaten estimates in two of the last four quarters, as shown in the chart below:


HollyFrontier Corporation Price and EPS Surprise

HollyFrontier Corporation Price and EPS Surprise | HollyFrontier Corporation Quote

Revenues Lags Estimates: Revenues of $4.3 billion missed the consensus mark of $5.9 billion but were ahead of the fourth-quarter 2017 sales of $4 billion. 


Key Tidbits: Adjusted EBITDA from the Refining segment, which is the main contributor to HollyFrontier’s earnings, was $583.4 million, up from the year-ago quarter’s income of $233.1 million. A 76.7% jump in the refining margins drove the results. 


Lubricants and Specialty Products unit generated negative EBITDA of  $3.9 million as against the profit of $40.5 million reported in the year-ago quarter owing to continued weakness base oil market weakness and turnaround activities in Mississauga plant in the quarter-under-review.


The company’s midstream unit Holly Energy Partners' EBITDA was $89.9 million, down from $124.6 million in fourth-quarter 2017. Lower volumes from UNEV pipeline and maintenance downtime at Woods Cross during the quarter impacted the results. 


Zacks Rank: Currently, HollyFrontier carries a Zacks Rank #5 (Strong Sell).


(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)


Check back later for our full write up on this HollyFrontier earnings report later!


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