Categories Earnings, Energy, Markets

Higher costs drag Marathon Petroleum Q3 earnings; stock dips

Marathon Petroleum Corp. (MPC) reported a decline in third-quarter earnings hurt by higher operating costs, despite strong revenue growth. Following the report, the company’s stock dropped about 3% in pre-market trading Thursday.

Net income decreased to $737 million $1.62 per share in the September quarter from $903 million or $1.77 per share in the same period last year. The bottom line, which was negatively impacted by a 22% rise in expenses, missed Wall Street estimates.

During the three-month period, revenues and other income moved up 19% annually to $23.13 billion, surpassing expectations. An uptick in the Refining & Marketing segment was more than offset by weaker Midstream activity. Operating income from the Speedway division dropped 23%.

During the three-month period, an uptick in the Refining & Marketing segment was more than offset by weaker Midstream activity

“The market environment appears favorable and our integrated business model enables us to capture opportunities including wider crude differentials and the changing dynamics of low-sulfur fuel requirements which we expect to begin to see in the second half of 2019,” said CEO Gary Heminger.

The Findlay, Ohio-based company returned about $607 million to shareholders through share repurchases and dividends in the third quarter.

On completion of the ongoing integration of Andeavor Logistics, which was acquired recently, the management expects to achieve more than $1 billion of annual run-rate synergies within the first three years. Andeavor is expected to add to the natural gas processing capacity and ramp up exports to Mexico. The outlook for the energy industry as a whole is positive, which stands to benefit from the favorable pricing scenario and growing production capacity.

Marathon agrees to buy Andeavor for $23.3 billion

Among the other energy firms, Chevron (CVX) is scheduled to report third-quarter results on Friday before the market opens. Last week, ConocoPhillips (COP) posted better-than-expected earnings for the third quarter when its revenue surged more than 40%.

Shares of Marathon Petroleum dropped 3% following the earnings report Thursday, after closing the previous trading session higher. The stock has risen 8% since the beginning of the year and 19% over the past twelve months.


Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Comment

Viewing Highlight