Advertisement
Australia markets closed
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • AUD/USD

    0.6513
    -0.0005 (-0.07%)
     
  • OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD

    2,254.80
    +16.40 (+0.73%)
     
  • Bitcoin AUD

    108,841.76
    +2,411.44 (+2.27%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • AUD/EUR

    0.6039
    +0.0005 (+0.08%)
     
  • AUD/NZD

    1.0904
    +0.0002 (+0.02%)
     
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,339.00
    +170.93 (+0.43%)
     

Delek US (DK) Q1 Earnings & Revenues Outpace Estimates

Delek US Holdings DK reported first-quarter 2023 adjusted net income of $1.37 per share, which beat the Zacks Consensus Estimate of $1.06 cents. The bottom line also improved from the year-ago quarter’s level of 58 cents. The outperformance could be attributed to record contributions from the Refining and Logistics segments.

Adjusted EBITDA came in at $284.6 million compared with $83.6 million in the year-ago period.

Net revenues decreased 12% year over year to $3.9 billion due to underperformance of the Retail segment. The figure, however, beat the consensus mark of $3.3 billion.

On May 2, 2023,  DK’s board of directors approved a 4.5% increase in the regular dividend, bringing the quarterly payout to 23 cents per share.

Delek US Holdings, Inc. Price, Consensus and EPS Surprise

Delek US Holdings, Inc. Price, Consensus and EPS Surprise
Delek US Holdings, Inc. Price, Consensus and EPS Surprise

Delek US Holdings, Inc. price-consensus-eps-surprise-chart | Delek US Holdings, Inc. Quote

Segmental Performances

Refining: In the first quarter of 2023, this segment recorded an adjusted EBITDA of $230.2 million, reflecting a remarkable improvement from the year-ago quarter’s level of $39.2 million.

ADVERTISEMENT

This significant year-over-year surge can be attributed to higher refining crack spreads, with DK’s benchmark crack spreads increasing approximately 29.6% during the period.

Logistics: During the reported quarter, the segment registered an adjusted EBITDA of $91.4 million compared with $64 million in the year-ago quarter. This substantial growth can be attributed to the exceptional performance of the Delek Permian Gathering system and the successful acquisition of 3 Bear Delaware.

Retail: Adjusted EBITDA for the segment amounted to $6.4 million, indicating a decline from the prior-year quarter’s $ 10.3 million.

The deterioration was largely due to lower average margins compared with the year-ago quarter’s figure.

Merchandise sales of $73.9 million were higher than the year-ago quarter’s level of $69.7 million. The figure missed the Zacks Consensus Estimate by 1.3%. The merchandise margin of 33.0% declined from 34.6% recorded in the year-ago period.

DK’s retail stations sold 39,964 thousand gallons of gasoline compared with 39,505 in the comparable period of 2022.

Financials

Total operating expenses in the first quarter decreased about 14.3% to $3,781.5 million from the prior-year period’s figure. Delek US spent $192 million on capital programs (about 76.6% on the Refining segment) in the same time frame.

As of Mar 31, 2022, the company had cash and cash equivalents worth $865 million and long-term debt of $2,725.5 million, with debt to total capital of about 71.2%.

Guidance

For the full-year 2023, Delek US expects capital expenditures of approximately $350 million. It plans to spend $202 million on Refining, $81 million on Logistics, $31 million on Retail and $36 million on Corporate/Other.

For the second quarter, DK expects operating costs of $195-$205 million, general and administrative costs of $70-$80 million, depreciation and amortization costs of $80-$90 million, and net interest expense of $70-$80 million.

Zacks Rank and Key Picks

Currently, Delek US carries a Zacks Rank #3 (Hold).

Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum EPM, sporting a Zacks Rank #1 (Strong Buy), and Archrock AROCand Ranger Energy Services RNGR, both holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Evolution Petroleum: EPM is worth approximately $219.16 million. EPM currently pays a dividend of 48 cents per share, or 7.38%, on an annual basis.

The company currently has a forward P/E ratio of 6.07. In comparison, its industry has an average forward P/E of 7.50, which means EPM is trading at a discount to the group.

Archrock: AROC is valued at around $1.55 billion. It delivered an average earnings surprise of 26.27% for the last four quarters and its current dividend yield is 6.06%.

Archrock is a provider of natural gas contract compression services and aftermarket services of compression equipment.

Ranger Energy Services: RNGR is valued at around $183.61 million. In the past year, its shares have gained 13.8%.

Ranger Energy Services currently has a forward P/E ratio of 5.30. In comparison, its industry has an average forward P/E of 11.60, which means RNGR is trading at a discount to the group.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Delek US Holdings, Inc. (DK) : Free Stock Analysis Report

Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report

Archrock, Inc. (AROC) : Free Stock Analysis Report

Ranger Energy Services, Inc. (RNGR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research