Marathon profit beats estimates on soaring margins; strikes $4.2 billion refinery deal with CVR
CVI•Marathon Petroleum earned adjusted third-quarter profit of $26.93 per share, beating estimates of $24.47, as its refining and marketing margin more than doubled to $45.70 per barrel. It agreed to sell two refineries to CVR Energy for $4.2 billion.
1. Profit and margins rise
Marathon Petroleum beat Wall Street estimates for third-quarter profit, earning $26.93 per share on an adjusted basis versus analysts’ estimates of $24.47. Its refining and marketing margin more than doubled to $45.70 per barrel, while crude capacity utilization reached 100% and throughput was 3.2 million barrels per day, up from 3 million a year earlier.
2. Two refineries to be sold
Marathon agreed to sell its St. Paul Park refinery in Minnesota and Mandan refinery in North Dakota to CVR Energy for $4.2 billion. Marathon will receive $3.45 billion, while its midstream subsidiary MPLX will receive $750 million for related infrastructure. The refineries have combined crude processing capacity of 177,000 barrels per day.
3. Plans and shareholder returns
CEO Maryann Mannen said Marathon plans to reinvest sale proceeds primarily in opportunities along the US Gulf Coast. For the fourth quarter, the company expects refinery throughput of 3.08 million barrels per day. 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.
