Oil refiner Marathon Petroleum Corp. (MPC) on Thursday reported a four-fold increase in profit for the third quarter from last year, helped by higher price realizations on its refined products and on improved crack spreads.
Gary Heminger, President and CEO of Marathon Petroleum said, "The efficiency and flexibility of our integrated downstream system enabled us to continue capturing opportunities in the markets we serve. Our ability to quickly adjust and direct refined products to the markets of greatest value has served consumers and MPC shareholders well."
Third-quarter net income attributable to the Findlay, Ohio-based company was $672 million or $2.36 per share, up from $168 million or $0.54 per share in the year-ago period. The latest quarter's results included pretax pension settlement expenses of $21 million, compared with $23 million for the prior-year quarter.
On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $2.29 per share for the quarter. Analysts' estimates typically exclude special items.
However, total revenues and other income for the quarter declined 3 percent to $25.48 billion from $26.27 billion, in the year-ago period. Analysts had a consensus revenue estimate of $26.83 billion for the quarter.
Total costs and expenses for the quarter declined 6 percent from last year to $24.42 billion.
Refining & Marketing segment income from operations for the quarter grew more than four-fold to $971 million, primarily due to more favorable net product price realizations and higher U.S. Gulf Coast and Chicago crack spreads, partially offset by higher turnaround and other direct operating costs.
Speedway segment income from operations rose 17 percent from last year to $119 million in the third quarter of 2014, reflecting higher light product and merchandise margins. This was partly offset by higher operating expenses attributable to an increase in the number of stores.
Pipeline Transportation segment income from operations, which includes 100 percent of MPLX's operations, increased 28 percent from the prior-year period to $69 million.
The results reflect an increase in pipeline transportation revenue and equity affiliate income, partially offset by higher operating expenses attributable mainly to pipeline maintenance and expenses related to MPLX's proposed Cornerstone Pipeline project.
Regarding its midstream operations, Marathon Petroleum said it plans to substantially accelerate the growth of MPLX LP (MPLX), the master limited partnership sponsored by the company. The company has authorized the sale of its remaining 31 percent interest in MPLX Pipe Line Holdings to MPLX.
MPLX is expected to provide unitholders an average annual distribution growth rate percentage in the mid-20s over the next five years.
MPC is trading at $90.37, up $2.96 or 3.39 percent on a volume of 2.34 million shares.
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