Marathon Petroleum Profit Rises 41%
October 29 2015 - 8:50AM
Dow Jones News
Marathon Petroleum Corp. said its third-quarter earnings rose
41% on stronger refining margins and growth in its retail and
pipeline businesses.
The Findlay, Ohio, company owns refineries in Texas, Louisiana,
and throughout the Midwest. It launched MPLX LP in 2012 to own and
operate pipelines and other fuel-transportation assets.
MPLX, which is controlled by Marathon Petroleum, in July reached
a $15.8 billion deal for MarkWest Energy Partners LP that will
combine Marathon's oil- pipeline network with MarkWest's business
separating natural gas into fuels such as propane and ethane.
While plunging oil and natural-gas prices haven't hit pipeline
operators as hard as other energy companies, analysts say the part
of the industry that builds and operates pipelines, natural-gas
processing facilities and storage terminals is facing pressure to
merge. During September, Energy Transfer Equity LP agreed to
acquire Williams Cos. in a $32.6 billion deal that will create a
massive U.S. network of natural-gas pipelines.
Chief Executive Gary R. Heminger said in prepared remarks
Thursday that in the latest quarter Marathon was able to capture
strong crack spreads—the difference between wholesale gasoline
prices and crude—while lower fuel prices helped boost demand for
its refined products.
In Marathon Petroleum's refining and marketing segment,
operating earnings soared 50% to $1.46 billion, mostly on higher
refining margins.
Marathon's Speedway retail business reported its operating
profit more than doubled to $243 million, with a boost from the
acquisition of Hess Corp.'s retail operations last year.
The pipeline segment, which includes Marathon's interest in
MPLX, recorded operating earnings of $72 million, an increase of
4.3%.
Overall, Marathon Petroleum reported a profit of $948 million,
or $1.76 a share, up from $672 million, or $1.18 a share, a year
earlier. The latest period included a $144 million write-down
related to the cancellation of a project at its Garyville, La.,
refinery. Revenue slumped 26% to $18.76 billion.
Analysts polled by Thomson Reuters expected a per-share profit
of $1.82 and revenue of $20.12 billion.
Valero Energy Corp. on Wednesday reported that its third-quarter
earnings rose 30% as the refiner's margins for gasoline and other
products benefited from low prices for crude. Phillips 66 is set to
report its third-quarter results Friday.
Write to Tess Stynes at tess.stynes@wsj.com
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(END) Dow Jones Newswires
October 29, 2015 08:35 ET (12:35 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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