Yahoo Finance How Did HFC’s Stock Perform after Its 1Q16 Earnings Release?
Why HollyFrontier Tumbled 9.5% on Its 1Q16 Earnings Release
HFC’s stock performance
HollyFrontier (HFC) announced its results on May 4, 2016, before market hours. On the day, the stock opened at $33.3 per share, lower than the previous day’s close of $34.4.
HFC saw highs of $33.5 and lows of $30.8 during the day. Eventually, the stock settled at $31.2, around 9.5% lower than its previous day’s close.
On May 4, 2016, HFC’s peers Alon USA Energy (ALJ), Marathon Petroleum (MPC), Tesoro (TSO), and Valero Energy (VLO) fell by 2.8%, 4.7%, 2.4%, and 2.6%, respectively. For broad-based exposure to energy sector stocks, you can consider the Energy Select Sector SPDR ETF (XLE).
HFC’s capex position
In 1Q16, HFC incurred capital expenditure (capex) of $149 million, compared to $173 million in 1Q15. HFC expects to incur capex of around $600 million in 2016.
HFC’s Woods Cross Expansion project is expected to start up in late May 2016. The crude and poly units have started, and the fluid catalytic cracker (or FCC) is under commissioning.
HFC has also completed the crude flexibility and crude tower modification modules of the project. This will result in higher production of naphtha and distillates. Plus, HFC completed its Tulsa FCC modernization project. The project is expected to improve yields, increase capacity, and result in annual EBITDA (earnings before interest, tax, depreciation, and amortization) improvement of around $20 million.
Management’s outlook
Discussing HFC’s 1Q16 performance, the company’s president and CEO George Damiris stated, “First quarter earnings reflect seasonally weak industry refining margins, which were 40% below the levels for the comparable period last year. Gasoline margins continue to strengthen, up between 40% and 70% versus first quarter levels. I expect gasoline margins to strengthen further and remain encouraged by the strong vehicle miles traveled data.”
Damiris continued, “We remain competitively positioned within the refining landscape given our gasoline weighting, crude slate flexibility and continued progress on the execution of our business improvement plan.”
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