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Marathon Petroleum Posts Impressive Jump In Profit

U.S. refiner Marathon Petroleum Corp (NYSE:MPC) was trading up over 4.3% close to close Tuesday after posting Q1 earnings showing an impressive jump in profit on the back of soaring oil prices and post-pandemic economic recovery. 

Marathon reported net profit of $845 million ($1.49 per share) for Q1, up from a loss of $242 million for the same quarter a year ago. The refiner also reported revenue gaining 68% on the quarter for #38.8 billion, up from $22.88 billion a year ago. 

High margins have been launching U.S. refiners into a “golden age”, and Marathon is no exception, with a refining unit profit margin increase of over $5 per barrel year-over-year and a capacity utilization rate of over 90%. 

Buybacks will now continue, with Marathon targeting another $7 billion. 

President and CEO Michael Hennigan said the company’s first-quarter results reflected its ability to execute on “strategic pillars” in “current market conditions”.

“This quarter we advanced our low carbon strategy with the announcement of our intent to form a joint venture with Neste at our Martinez Renewable Fuels Facility and a 15% Scope 3 absolute GHG emission reduction target. We have now completed approximately $8 billion of MPC share repurchases since the inception of our $10 billion return of capital program,” Hennigan said. 

Other refiners have also soundly beat Wall Street expectations this earnings season. 

Last week, Valero saw its profit surge as its refining margin more than doubled, reporting Q1 adjusted net income of $944 million ($2.31 per share), with revenues of $38.5 billion, up from $20.8 billion a year ago.

On Friday, Phillips66 reported Q1 earnings of $582 million ($1.29 per share), and the generation of $1.1 billion in operating cash flow. 

The European Union’s desperate struggle to eliminate Russian oil and gas from its energy equation means more dependence on the United States. In turn, that has led to a large new market for American refiners at a time of highly elevated prices. 

By Tom Kool for Oilprice.com

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  • George Doolittle on May 03 2022 said:
    "internal free cash flow exploding higher" absolutely.

    Unless of course you're Intel.
    Long $f Ford Motor Company
    Strong buy

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