Marathon Petroleum Corp (NYSE: MPC) reported on Tuesday higher-than-expected earnings and revenues for the first quarter despite lower refining margins and profits compared to the same period last year.
Top U.S. refiner Marathon Petroleum beat first-quarter
profit estimates on Tuesday, as demand for refined products remained at high
levels and global fuel supplies tightened due to refinery maintenance
activities and disruptions in Russia.
The refiner also announced a $5 billion increase to its
share repurchase authorization.
Heavy refinery maintenance work during the quarter and
outages at Russian refineries following Ukrainian drone attacks reduced fuel
supplies to global markets.
Demand for fuel remained stable. U.S. product supplied, a
proxy for demand, averaged at 20.10 million barrels per day (bpd) at the end of
March, compared with 19.7 million bpd a year earlier, according to U.S. Energy
Information Administration data.
Marathon said it completed $648 million of planned
turnaround activity in the reported quarter, the highest level in the company's
history.
Turnarounds lowered utilization to 82%, which contributed to
refining operating costs per barrel of $6.14 during the first quarter.
Its total throughput was 2.7 million bpd in the
January-March quarter, compared with 2.8 million bpd a year earlier. For the
second quarter, Marathon expects total refinery throughput of 2.97 million bpd.
Refining and marketing margin fell over 27% to $18.99 per
barrel for the first quarter, compared with a year earlier, the biggest U.S.
refiner by volume said.
The beat is not big enough to create a "wow"
factor, said analysts at Scotiabank.
"Turnaround expense came in higher than guidance
suggesting the turnaround did not proceed as smoothly as hoped,"
Scotiabank added.
Margins and profits of U.S. refiners have normalized after
hitting sky-high levels in 2022, when Russia's invasion of Ukraine disrupted
crude supplies.
The refiner posted net income of $2.58 per share, for the
three months ended March 31, topping average analysts' estimate of $2.42 per
share.
It reported a profit of $6.09 per share a year earlier.
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