Marathon Petroleum’s Q3 Results Spark Rally
Strong Revenue Performance
Marathon Petroleum Corporation’s (NYSE:MPC) third-quarter results have sent its shares soaring. The company’s total revenues and other income reached $35.4 billion, surpassing the consensus estimate of $32.8 billion. This impressive performance can be attributed to its refining and marketing segment, which saw refined product sales volume increase to 3,685 mbpd, up from 3,596 mbpd in the same quarter last year.
Refining Operating Costs Remain Under Control
Despite rising costs, Marathon Petroleum’s refining operating costs per barrel remained relatively stable at $5.30, only a slight increase from $5.14 a year ago. Crude oil capacity utilization also remained flat at 94%, indicating the company’s ability to maintain efficiency in its operations.
Adjusted EBITDA and EPS Exceed Expectations
The company’s adjusted EBITDA for the quarter came in at $2.49 billion, although this represents a decline from $5.71 billion in the prior year quarter. However, Marathon Petroleum’s adjusted EPS of $1.87 exceeded the consensus estimate of $0.98, demonstrating the company’s ability to generate strong profits.
Strong Cash Position and Shareholder Rewards
As of September-end, Marathon Petroleum had a robust cash position of $5.1 billion, accompanied by $5 billion available on its bank revolving credit facility. The company returned a significant $3.0 billion to shareholders in the third quarter, comprising $2.7 billion in share repurchases and $273 million in dividends. Additionally, the company’s board approved an incremental $5 billion share repurchase authorization, bringing the total available under its share repurchase authorizations to $8.5 billion.
Outlook and Dividend Increase
Marathon Petroleum expects refining operating costs per barrel to rise to $5.50 in the fourth quarter, while refinery throughputs are anticipated to reach 2,880 mbpd. Furthermore, the company increased its quarterly dividend to $0.91 per share, payable on December 10 to shareholders of record on November 20.
MPLX LP’s Third-Quarter Performance
MPLX LP (NYSE:MPLX), in which Marathon Petroleum owns a majority stake, reported third-quarter earnings per limited partner unit of $1.01, missing the consensus estimate of $1.07. Revenues also fell short of expectations, reaching $2.97 billion. Despite this, MPLX returned $949 million of capital to unitholders in the quarter.
Investment Opportunities
Investors seeking exposure to Marathon Petroleum can consider the iShares U.S. Oil & Gas Exploration & Production ETF (BATS:IEO) and the VanEck Oil Refiners ETF (NYSE:CRAK).
Price Action
MPC shares are currently trading up 2.80% at $149.00 premarket.
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