Marathon Petroleum (NYSE: MPC), the biggest U.S. refiner by volumes, topped the average analyst estimates for second-quarter earnings, on the back of increased refining margins which helped it reverse a first-quarter loss.
Marathon Petroleum on Tuesday reported second-quarter net income of $1.2 billion, or $3.96 per diluted share. That’s lower than the $1.5 billion net income, or $4.33 per share, for the second quarter of 2024, but higher than the analyst consensus of $3.22 EPS compiled by the Wall Street Journal.
The second-quarter performance was materially better compared to Q1, in which Marathon Petroleum booked a loss, as weak refining margins depressed profits and high turnaround activity limited the upside from margins and sales revenues.
With the second quarter, higher refining margins and better-than-expected diesel margin strength combined with higher motor fuel demand as road trips returned with the spring. U.S. refiners benefited from all these, and were expected to book higher profits compared to Q1.
“In refining, our team delivered 97% utilization and 105% margin capture; and we remain constructive on the long-term outlook,” said Marathon Petroleum’s president and CEO, Maryann Mannen.
Another major U.S. refiner, Valero Energy (NYSE: VLO), also beat consensus estimates as it reported last month a second-quarter net income of $714 million, or $2.28 per share—easily beating the $1.75 EPS average estimate by analysts. Rising refining margins and stronger utilization helped Valero, too.
The refiner set a record for refining throughput rate in its U.S. Gulf Coast region in the second quarter, Lane Riggs, chairman, CEO, and president, told analysts during the Q2 earnings call.
“Refining margins were supported by strong product demand against the backdrop of low product inventories globally,” Riggs said.
“In particular, early July U.S. diesel inventories and days of supply are at the lowest level for the month in almost thirty years.”
By Michael Kern for Oilprice.com
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