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PBF Energy (PBF) Down 16.1% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research
Glacier Bancorp (GBCI) delivered earnings and revenue surprises of 3.28% and -0.33%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

A month has gone by since the last earnings report for PBF Energy (PBF). Shares have lost about 16.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is PBF Energy due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

PBF Energy Q1 Earnings Miss, Revenues Beat Estimates

PBF Energy posted first-quarter 2019 loss of $1.18 a share, wider than the Zacks Consensus Estimate of 95 cents and the year-ago quarter loss of 29 cents. The underperformance can be attributed to a decline in refining margin per barrel of throughput following strong turnarounds and maintenance activities. Lower crude oil and feedstocks throughput volumes added to the concern.

Total revenues fell to $5,216 million from $5,803 million in the prior-year quarter. The top line, however, beat the Zacks Consensus Estimate of $4,520 million.  

Segmental Performance

Operating income at the Refining segment was $389.5 million, up from $127 million in the year-ago quarter.

The company generated profit of $34.2 million from the Logistics segment, which shows an improvement from the prior-year quarter’s $33.9 million.

Throughput Volumes

In the quarter under review, crude oil and feedstocks throughput volumes were 743.1 thousand barrels per day (BPD), down from 799.6 thousand BPD in the year-ago quarter.

The East Coast, Mid-Continent, Gulf Coast and West coast regions accounted for roughly 41%, 20%, 22% and 17%, respectively, of the total oil and feedstocks throughput volume. 

Throughput Margins

Company-wide gross refining margin per barrel of throughput — excluding special items — was recorded at $6.38, lower than the year-earlier quarter’s $7.26. This was owing to strong turnarounds and maintenance activities.

Refining margin per barrel of throughput was $3.35 in the East Coast, down from $6.47 in the year-earlier quarter. Refining margin realized was $3.33 per barrel in the Gulf Coast, down from $4.45 in the prior-year quarter. The metric was $10.76 per barrel in the West Coast, down from $10.81 in the prior-year quarter. However, the metric was $12.28 a barrel in the Mid-Continent, higher than $8.22 a year ago.

Refining operating expense per barrel of throughput was $6.78, higher than $5.72 in the year-ago quarter.         

Capital Expenditure & Balance Sheet

Through the first quarter, the company spent $247.1 million capital on refining operations and $11.2 million on logistics businesses.

At the end of the quarter, the company had cash and cash equivalents of $418.3 million along with total debt of $2.2 billion, the debt-to-capitalization ratio being 39%. 

Guidance

PBF Energy projects total daily throughput volumes for the June quarter of 2019 from the East Coast in the range of 320,000-340,000 barrels, while the same from the Mid-Continent is expected in the band of 160,000-170,000 barrels. Total daily throughput volumes at the Gulf Coast are expected in the range of 190,000-200,000 barrels, while that at the West Coast is anticipated within 160,000-170,000 barrels.

Through 2019, the company anticipates total daily throughput volumes from the East Coast between 330,000 barrels and 350,000 barrels. The same from the Mid-Continent is projected at 150,000-160,000 barrels, while the Gulf Coast is anticipated to generate 190,000-200,000 barrels.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 11.62% due to these changes.

VGM Scores

Currently, PBF Energy has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, PBF Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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