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PBF Energy's (PBF) Earnings Beat Estimates in Q4, Fall Y/Y

Zacks Equity Research

PBF Energy Inc. PBF reported fourth-quarter 2019 earnings of 60 cents a share, beating the Zacks Consensus Estimate of 50 cents but deteriorating from the year-ago quarter’s $1.03.

Total revenues increased to $6,301.5 million from $6,292.9 million in the prior-year quarter. The top line also beat the Zacks Consensus Estimate of $5,887 million.  

The better-than-expected results were aided by higher refining margin per barrel in the Gulf and West Coasts, and lower costs and expenses. The positives were partially offset by decline in realized refining margin per barrel of throughput in the East Coast and Mid-Continent.

PBF Energy Inc. Price, Consensus and EPS Surprise

PBF Energy Inc. Price, Consensus and EPS Surprise

PBF Energy Inc. price-consensus-eps-surprise-chart | PBF Energy Inc. Quote

On Feb 1, 2020, the company closed the 157,000-barrel per day Martinez refinery acquisition, which increased total throughput capacity to more than 1 million barrels a day. It is currently the most complex refiner with 12.8 Nelson Complexity.

Segmental Performance

Operating income at the Refining segment was $184.9 million, significantly improving from a loss of $397.7 million a year ago.

The company generated profit of $42.9 million from the Logistics segment, which reflects an improvement from the prior-year quarter’s $38.6 million.

Costs & Expenses

Total costs and expenses in the reported quarter were $6,178.6 million, lower than $6,739.1 million in the year-ago period. Cost of sales — which includes operating expenses, cost of products and others — amounted to $6,066.3 million, lower than the year-ago level of $6,650.8 million.

Throughput Volumes

In the quarter under review, crude oil and feedstocks throughput volumes were 843 thousand barrels per day, flat year over year.  

The East Coast, Mid-Continent, Gulf Coast and West Coast regions accounted for roughly 42.3%, 17.8%, 19.9% and 20%, respectively, of the total oil and feedstock throughput volume. 

Throughput Margins

Company-wide gross refining margin per barrel of throughput — excluding special items — was recorded at $9.31, lower than the year-earlier quarter’s $10.00.

Refining margin per barrel of throughput was $8.16 in the East Coast, down from $8.55 in the year-earlier quarter. Realized refining margin was $6.05 per barrel in the Gulf Coast, up from $5.83 in the prior-year quarter. The metric was $14.85 per barrel in the West Coast, up from $10.57 a year ago. Also, the metric was $9.42 a barrel in the Mid-Continent, much lower than $17.76 a year ago.

Refinery operating expense per barrel of throughput was $5.28, lower than $5.56 in the year-ago quarter.

Capital Expenditure & Balance Sheet

Through the fourth quarter, the company spent $108.7 million capital on refining operations and $8.5 million on logistics businesses.

At the end of the quarter, it had cash and cash equivalents of $814.9 million, along with total debt of $2,064.9 million, with the debt-to-capitalization ratio being 37%. 

Guidance

PBF Energy projects total daily throughput volumes for the March quarter of 2020 from the East Coast in the range of 345,000-365,000 barrels, while the same from the Mid-Continent is anticipated in the band of 95,000-105,000 barrels. Total daily throughput volumes at the Gulf Coast are expected in the range of 165,000-175,000 barrels, while the same from the West Coast is anticipated within 260,000-280,000 barrels.

Zacks Rank & Stocks to Consider

PBF Energy currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector include Denbury Resources Inc. DNR, Chevron Corporation CVX and Hess Corporation HES, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Denbury Resources’ earnings per share estimates of 30 cents for 2020 have been unchanged over past seven days.

Chevron’s bottom line for 2020 is expected to rise 12.8% year over year.

Hess’ bottom line for 2020 is expected to rise 93.7% year over year.

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