By Nicole Jao and Tanay Dhumal
NEW YORK, Feb 3 (Reuters) – Marathon Petroleum reported fourth-quarter profit above Wall Street estimates on Tuesday, as a 44% jump in refining margins underscored stronger operational performance.
Shares of the country’s top refiner were up 2.6% at $181.56 on Tuesday afternoon.
Top fuelmakers reaped unexpected profits last year as product margins, driven largely by Russia’s war in Ukraine, rebounded from the multiyear lows seen in 2024 when earnings eased from post-pandemic highs.
STRONG REFINING MARGINS BOOST
“We capitalized on a strong refining margin environment while executing planned turnarounds safely and on time,” said Maria Khoury, the refiner’s new chief financial officer, during a Tuesday conference call.
Refining margin was at $18.65 per barrel for the quarter, up more than 44% from a year ago, boosting its refining and marketing earnings to about $2 billion, up from $559 million a year earlier.
Adjusted profit for the quarter was $4.07 per share, compared with analysts’ average estimate of $2.88 per share, according to data compiled by LSEG.
That helped the company counter a 46% surge in quarterly turnaround expenses for its refineries to $410 million.
Valero Energy, the second-largest U.S. refiner by capacity, last week also beat quarterly earnings estimates on the back of a rebound in refining margins and record throughput volume.
High refining utilization and throughput also provided support.
The refiner ran its refineries at around 95% during the quarter, with total throughput volumes just over 3 million barrels per day. Its 606,000 barrel-per-day Garyville, Louisiana, refinery and 253,000-bpd Robinson, Illinois, refinery both hit monthly crude throughput records during the quarter, executives said.
Marathon expects throughput volumes of 2.74 million barrels per day and turnaround expenses of $465 million for the first quarter.
NEW REFINING PROJECTS
The Findlay, Ohio-based refiner on Tuesday announced three new projects aiming to optimize its Gulf Coast refineries. It plans to upgrade its feedstock slate and increase flexibility to produce incremental export premium gasoline at its Garyville refinery. It also plans to upgrade the fluid catalytic cracker and alkylation units at the 133,000-bpd El Paso, Texas, refinery. The projects add around $200 million to its capital budget for this year.
The refiner also expects to benefit from the full-scale resumption of Venezuelan oil exports and lower fuel production costs. Its 631,000-bpd refinery in Galveston Bay, Texas, and the Garyville refinery are capable of running Venezuelan crude.
(Reporting by Nicole Jao in New York and Tanay Dhumal in Bengaluru; Editing by Shilpi Majumdar and Matthew Lewis)
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