Why Is PBF Energy (PBF) Down 6.9% Since Last Earnings Report?

A month has gone by since the last earnings report for PBF Energy (PBF). Shares have lost about 6.9% 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 drivers.

PBF Energy Beats Earnings & Revenue Estimates in Q4

PBF Energy posted fourth-quarter 2018 profit of $1.03 a share, beating the Zacks Consensus Estimate of 77 cents. In the year-earlier quarter, the company reported a loss of 4 cents. Higher refining margins primarily backed the company’s strong quarterly earnings. This was partially offset by lower crude oil and feedstocks throughput volumes.

Total revenues fell to $6,293 million from $6,536 million in the prior-year quarter. The top line, however, beat the Zacks Consensus Estimate of $6,123 million.

Segmental Performance

Operating loss at the Refining segment was $397.7 million against a profit of $293 million in the year-ago quarter due to lower crude oil and feedstocks throughput volumes.

The company generated profit of $38.6 million from the Logistics segment, which shows an improvement from the prior-year quarter’s $35.6 million.

Throughput Volumes

In the quarter under review, crude oil and feedstocks throughput volumes were 842.7 thousand barrels per day (BPD), down from 870.9 thousand BPD in the year-ago quarter.

The East Coast, Mid-Continent, Gulf Coast and West coast regions accounted for approximately 39.3%, 17.8%, 22.4% and 20.5%, 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 $10, higher than the year-earlier quarter’s $7.06.

Refining margin per barrel of throughput was $8.55 in the East Coast, up from $4.02 in the year-earlier quarter. The metric was $17.76 a barrel in the Mid-Continent, higher than $12.17 a year ago. Refining margin realized was $5.83 per barrel in the Gulf Coast, down from $6.12 in the prior-year quarter. The metric was $10.57 per barrel in the West Coast, marginally up from $10.24 in the prior-year quarter.

Refining operating expense per barrel of throughput was $5.56, higher than $5.01 in the year-ago quarter.

Capital Expenditure & Balance Sheet

Through the fourth quarter, the company spent $175.3 million capital on refining operations and $89.1 million on logistics businesses.

At the end of the quarter, the company had cash and cash equivalents of $597.3 million along with total debt of $1.9 billion, the debt-to-capitalization ratio being 37.3%.

Guidance

PBF Energy projects total daily throughput volumes for first-quarter 2019 from the East Coast in the range of 300,000-320,000 barrels, while the same from the Mid-Continent is expected in the band of 135,000-145,000 barrels. Total daily throughput volumes at the Gulf Coast are expected in the range of 175,000-185,000 barrels, while that at the West Coast is anticipated within 130,000-140,000 barrels.

Through 2019, the company anticipates total daily throughput volumes from the East Coast between 325,000 barrels and 345,000 barrels. The same from the Mid-Continent is projected at 150,000-160,000 barrels, while the Gulf Coast is anticipated to generate 195,000-205,000 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 -643.7% due to these changes.

VGM Scores

Currently, PBF Energy has a strong 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 B on the value side, putting it in the top 40% 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision 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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