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Marathon Petroleum (MPC) Q1 Earnings Crush Loss Estimate

Zacks Equity Research

Have you been eager to see how Marathon Petroleum MPC – a leading downstream operator – performed in Q1 in comparison with the market expectations? Let’s quickly scan through the key facts from this Findlay, OH-based company’s earnings release this morning:

About Marathon Petroleum: Marathon Petroleum is a leading independent refiner, transporter and marketer of petroleum products. The company operates in three segments: Refining and Marketing, Speedway (Retail), and Pipeline Transportation.

Zacks Rank & Surprise History: Currently, Marathon Petroleum has a Zacks Rank #3 (Hold) but that could change following its first quarter 2017 earnings report which has just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Coming to earnings surprise history, the company has a mixed record: its missed estimates in 2 of the last four quarters resulting in an average negative surprise of 1.43%.

Marathon Petroleum Corporation Price and EPS Surprise

Marathon Petroleum Corporation Price and EPS Surprise | Marathon Petroleum Corporation Quote

We have highlighted some of the key details from the just-released announcement below:

Earnings Crush Loss Estimate: Earnings per share came in at 6 cents, contrary to the Zacks Consensus Estimate for a loss of a penny. Solid operational performance from its ‘Midstream’ unit led to the underperformance.

Revenue Came in Lower than Expected: Marathon Petroleum posted revenues of $16,393 million, missing the Zacks Consensus Estimate of $19,030.9 million. However, revenues rose 28% on a year-over-year basis.

Key Stats: Operating loss from the Refining & Marketing segment – which is the main contributor to Marathon Petroleum earnings – was $70 million compared with a loss of $86 million in the year-ago quarter. The improvement reflects higher gross margin.

Total refined product sales volumes were 2,085 thousand barrels per day (mbpd), down 3% from the 2,158 mbpd in the year-ago quarter. Moreover, throughput deteriorated from 1,774 mbpd in the year-ago quarter to 1,708 mbpd.

Income from the Speedway retail stations totaled $135 million, 19% lower than the $167 million earned in the year-ago period. Fall in merchandise margins hampered the results.

Finally, Midstream segment profitability was $309 million, up significantly from $189 million in the first quarter of 2016. Earnings were buoyed by new pipeline and marine equity investments as well as increased processing and fractionation activity.

Share Performance: Marathon Petroleum shares have risen 16% over the past 6 months, while the Zacks categorized Oil Refining & Marketing industry has gained just 1%.

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

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