A month has gone by since the last earnings report for PBF Energy (PBF). Shares have lost about 5.7% 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 Misses Q2 Earnings Estimates on Lower Refining Margin
PBF Energy reported second-quarter 2019 earnings of 83 cents a share, missing the Zacks Consensus Estimate of 87 cents and deteriorating from the year-ago quarter’s $1.38. The underperformance was due to lower crude oil and feedstock throughput volumes. The decline in realized refining margin per barrel of throughput in the East Coast and Gulf Coast added to the concern.
Total revenues declined to $6,560 million from $7,444 million in the prior-year quarter. The top line, however, beat the Zacks Consensus Estimate of $6,044 million.
Operating income at the Refining segment was $23.7 million, substantially down from $447.6 million a year ago.
The company generated profit of $37.8 million from the Logistics segment, which shows an improvement from the prior-year quarter’s $33.8 million.
In the quarter under review, crude oil and feedstocks throughput volumes were 854.1 thousand barrels per day (BPD), down from 866.6 thousand BPD in the year-earlier quarter.
The East Coast, Mid-Continent, Gulf Coast and West coast regions accounted for roughly 38%, 19%, 24% and 19%, respectively, of the total oil and feedstock throughput volume.
Company-wide gross refining margin per barrel of throughput — excluding special items — was recorded at $9.10, lower than the year-earlier quarter’s $9.77. This was due to extended turnarounds activities.
Refining margin per barrel of throughput was $4.18 in the East Coast, down from $7.17 in the year-earlier quarter. Refining margin realized was $5.61 per barrel in the Gulf Coast, down from $7.92 in the prior-year quarter. However, the metric was $17.51 per barrel in the West Coast, up from $14.88 a year ago. Also, the metric was $14.87 a barrel in the Mid-Continent, higher than $12.63 a year ago.
Refinery operating expense per barrel of throughput was $5.27, higher than $5.11 in the year-ago quarter.
Capital Expenditure & Balance Sheet
Through the second quarter, the company spent $235.9 million capital on refining operations and $4 million on logistics businesses.
At the end of the quarter, the company had cash and cash equivalents of $204.1 million along with total debt of $2 billion, the debt-to-capitalization ratio being 37%.
PBF Energy projects total daily throughput volumes for the September quarter of 2019 from the East Coast in the range of 350,000-370,000 barrels, while the same from the Mid-Continent is anticipated in the band of 155,000-165,000 barrels. Total daily throughput volumes at the Gulf Coast are expected in the range of 170,000-180,000 barrels, while that at the West Coast is anticipated within 170,000-180,000 barrels.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -18.4% due to these changes.
Currently, PBF Energy has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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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