Marathon Petroleum (MPC) Jumps After Destroying Low Earnings Expectations

Michael Teague |

It was the downstream oil and gas industry’s turn to report earnings for the recently-ended fourth quarter ahead of the opening bell on Wednesday. While the biggest publicly traded firms like Phillips 66 (PSX) , Hess Corporation (HES) and Marathon Petroleum (MPC) were all less profitable on a year-over-year basis, all were trading higher into midday due to beating street expectations.

Marathon was far ahead of the pack, however, with shares up over 5 percent and approaching the stock’s 52-week high of $91.95 per share. The company said that during the recently-ended period, it had earned $633 million, or $2.10 per share on revenue of $24.9 billion, compared to the prior year’s Q4 during which net earnings were at $755 million, or $2.26 per share on revenue of $20.69 billion. The year-over-year decrease in net profit for the quarter was adequately made up for by the fact that earnings blew past street estimates, nearly doubling up on expectations of $1.16 per share.

For the full year 2013, profits were also better than had been anticipated, as the company posted $6.81 per share against expectations for an eps figure of about $1 lower at $5.91. Full year revenue of $100.3 billion was nearly a 22 percent gain on the previous year’s, and also ahead of estimates of $98.5 billion.

By segment, company’s refining suffered from lower margins than the previous year, which was largely attributed to greater expenses resulting from shutdowns and repairs, as well as the WTI/Brent crude spread that was narrower for most of the year as US crude production hit new highs throughout the year. The company’s midstream pipeline segment also suffered a 35 percent decline in profitability, but much of this was countered by a 27 percent increase in sales volume from the refining/marketing segment. Also, the company’s retail segment beat out the prior year’s quarter by $6 million.

Heading towards the closing bell, shares for Marathon were trading on heavy volume at around $86.90 a piece.

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Companies

Symbol Name Price Change % Volume
HES Hess Corporation 61.72 0.77 1.26 2,935,306
MPC Marathon Petroleum Corporation 50.24 0.59 1.19 2,654,802
PSX Phillips 66 87.65 0.64 0.74 1,111,612
ONCGF Oncology Venture Sweden AB 6.46 0.00 0.00 0

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