Marathon beats quarterly estimates, to sell two refineries to CVR Energy
CVI•Marathon Petroleum beat third-quarter adjusted profit estimates, earning $26.93 per share, and agreed to sell two refineries and related midstream assets to CVR Energy for $4.2 billion. Its refining and marketing margin more than doubled to $45.70 per barrel.
1. Earnings and operations
Marathon Petroleum reported adjusted third-quarter earnings of $26.93 per share, above analysts’ estimate of $24.47. Its refining and marketing margin more than doubled to $45.70 per barrel. Crude capacity utilization was 100%, with throughput of 3.2 million barrels per day, compared with 95% utilization and 3 million bpd a year earlier. Marathon expects fourth-quarter throughput of 3.08 million bpd.
2. Refinery sale
Marathon will receive $3.45 billion for the St. Paul Park refinery in Minnesota and Mandan refinery in North Dakota. Midstream subsidiary MPLX will receive $750 million for related infrastructure. The refineries have combined crude processing capacity of 177,000 bpd, and the deal is expected to close by the end of 2026.
3. Capital and partnership
Marathon returned $3.3 billion to shareholders during the quarter, raised its quarterly dividend by 10% and increased share buyback capacity to $8.1 billion with an additional $5 billion authorization. It plans to reinvest sale proceeds primarily along the U.S. Gulf Coast, while MPLX plans to fund growth projects in the Permian and Marcellus basins. Trafigura agreed to invest $800 million in newly issued CVR shares for a minority stake and become the exclusive crude supplier and trading intermediary for the acquired refineries.
