Yahoo Finance Marathon Petroleum’s 1Q16 Earnings Missed Estimates
Weak Refining Segment Hurt Marathon Petroleum's 1Q16 Results
Marathon Petroleum’s 1Q16 estimated versus actual performance
In 1Q16, Marathon Petroleum (MPC) posted revenues of $12.8 billion, which surpassed Wall Street analyst estimates. However, after adjusting EPS for inventory valuation and goodwill impairment charges, adjusted EPS stood at $0.06, which is ~59% lower than the estimated EPS of $0.15. Also, the posted EPS is 96% lower than the company’s 1Q15 adjusted EPS.
Marathon Petroleum’s 1Q16 earnings fell
Marathon Petroleum’s net income fell from $891 million in 1Q15 to $1 million in 1Q16. This was due to a fall in the operating income of its refining segment, partly offset by a rise in income from its midstream segment. Income from the Speedway (or marketing) segment fell marginally. There was also a charge of $15 million in 1Q16 due to lower cost or market inventory valuation. Plus, a goodwill impairment charge of $129 million was recorded by MPLX (MPC-sponsored master limited partnership).
Specifically, MPC posted an operating loss in its refining segment. However, the midstream and Speedway segments’ operating incomes stood at $167 million each in 1Q16. We’ll discuss MPC’s segmental 1Q16 performance in the next part of this series.
MPC’s peers Northern Tier Energy (NTI) and Western Refining (WNR) are expected to post 90% and 86% lower EPS in 1Q16 over 1Q15, respectively. According to Wall Street analyst estimates, Alon USA Energy (ALJ) is expected to post a loss in 1Q16. The PowerShares Dynamic Large Cap Value ETF (PWV) has about ~11% exposure to energy sector stocks.
In the next article, let’s look at a segmental analysis of Marathon Petroleum’s 1Q16 results.
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