Marathon Petroleum Corporation
CEO : Mr. Michael J. Hennigan
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 12.7% YoY | 156.7% | 457.0% | 2023-01-31 |
Maryann Mannen says,
Financial Results
- MPC reported adjusted earnings per share of $6.65 in Q4 2022, which excludes a $176 million LIFO inventory benefit and $60 million gain related to the Speedway transactions.
- Adjusted EBITDA was $5.8 billion for the quarter and cash flow from operations, excluding unfavorable working capital changes, was $4.4 billion.
- During the quarter, MPC returned $351 million to shareholders through dividend payments and repurchased over $1.8 billion of its shares.
Refining and Marketing
- Refining and marketing capture this quarter was 109%, reflecting a strong result from MPC’s commercial team.
- Refining operating costs per barrel were roughly flat in Q4 2022 at $5.62 per barrel as compared to Q3 2022, while the full year refining operating cost per barrel is $5.41.
- Due to lower throughputs and special compensation expenses, refining operating costs per barrel were roughly flat in Q4 2022.
Segment Results
- MPC’s Midstream segment delivered resilient Q4 2022 results, but did see lower EBITDA primarily due to impacts associated with lower NGL prices.
- MPLX distributions contributed $502 million in cash flow to MPC in Q4 2022.
Capital Investment Plan
- MPC’s investment plan, excluding MPLX, totals approximately $1.3 billion for 2023, split between low carbon and traditional projects.
- The plan includes $1.25 billion for the refining and marketing segment, of which roughly 30% is related to maintenance and regulatory compliance.
Guidance
- MPC expects crude throughput volumes of roughly 2.5 million barrels per day, representing 88% utilization in Q1 2023.
- Operating costs per barrel in Q1 2023 are expected to be flat at $5.60 per barrel for the quarter.
- Distribution costs are expected to be approximately $1.3 billion for the quarter, while corporate costs are expected to be $175 million.
Brian Partee says,
Global oil demand expected to increase
- Year-on-year 2.3 million barrels a day of overall oil demand increase in 2022
- Continued increases expected into 2023 and beyond
Demand for diesel remains resilient
- Diesel has been resilient throughout post-COVID recovery
- Domestically, diesel remains resilient in the US
- Gasoline demand is off about 3% on the gasoline front from 2019 levels
- Jets steady rate double recovery as what we’ve seen the last couple of years, we expect to see full recovery domestically here as we progress through 2023
Q4 2022 book highlights
- Gasoline up 2% year-on-year
- West Coast saw a 5% increase year-on-year in the fourth quarter for gasoline
- Diesel up 4% year-on-year
- Jet up 3% year-on-year
Q & A sessions,
Share Buyback and Return of Capital
- MPC completed $15 billion share repurchase in October 2022 and announced an incremental $5 billion authorization, leaving $7.6 billion share buyback authorization.
Commitment to $1 Billion Cash Level
- MPC feels comfortable within a range of outcomes that $1 billion cash level is appropriate because of its liquidity, stress-tested liquidity during the pandemic, and $2 billion distribution from MPLX.
Commercial Performance
- MPC’s commercial team delivered a strong performance with 109% capture rate in Q4 2022, strong light product margins, favorable inventory impacts, and favorable pricing of secondaries.
- Commercial team is moving toward 100% capture rate and will continue to challenge themselves to deliver that.
Russian Sanctions and Inventory Levels
- MPC expects the impact of Russian sanctions to start unfolding in 2Q 2023.
- Historically high levels of inventory in Europe will be displaced due to 800 million to 1 million barrels a day of structural historical imports into Northwest Europe coming out of Russia.
- MPC sees the situation as bullish for cracks, but there will be headwinds due to various regional specifications, global tanker fleet overburdening, and supply assurance.
- MPC is well positioned to take advantage of the situation given its position in the Atlantic basin and active presence in London market.
Distribution of Exports
- Historically, a large portion of exports have moved into Latin America, but MPC expects an incremental pull into Europe.
- MPC has good fit for its Garyville distillate stream into Northwest Europe and has seen exports into the region late last year.
No bad stock 