Yahoo Finance Marathon Petroleum Corp Reports Decline in Q1 2024 Earnings Amid Major Refinery Maintenance
First-quarter net income: $937 million, or $2.58 per diluted share.
Adjusted EBITDA: $3.3 billion for the first quarter of 2024, down from $5.2 billion in the same quarter of 2023.
Net cash from operating activities: $1.5 billion, reflecting robust operational cash flow.
Capital returned to shareholders: $2.5 billion through share repurchases and dividends.
New share repurchase authorization: Announced an additional $5 billion, underscoring a strong commitment to returning capital to shareholders.
Midstream growth: Advanced with new processing plants in the Marcellus and Permian basins and acquisition of Utica midstream assets.
Refining & Marketing segment adjusted EBITDA: $1.9 billion, a decrease from $3.9 billion in the first quarter of 2023.
On April 30, 2024, Marathon Petroleum Corp (NYSE:MPC) disclosed its first-quarter financial results through an 8-K filing. The company reported a net income attributable to MPC of $937 million, or $2.58 per diluted share, a significant decrease from the $2.7 billion, or $6.09 per diluted share, recorded in the same quarter the previous year. The adjusted EBITDA also saw a reduction, coming in at $3.3 billion compared to $5.2 billion in Q1 2023.
Marathon Petroleum, a leading independent refiner, operates the largest refining system in the U.S. with a capacity of 3.0 million barrels per day across 13 refineries. The company also holds substantial midstream assets, primarily through MPLX LP, enhancing its operational and financial flexibility.
Operational Highlights and Financial Performance
The first quarter was marked by the largest planned maintenance in the company's history, affecting four of its largest refineries. This extensive maintenance was crucial for preparing the facilities for the high demand expected during the summer travel season. Despite the reduced throughput, which fell to 2.7 million barrels per day from higher levels in the previous year, the company managed to navigate these challenges effectively.
Financially, the Refining & Marketing (R&M) segment adjusted EBITDA plummeted to $1.9 billion from $3.9 billion year-over-year, primarily due to lower market crack spreads and decreased throughput. The Midstream segment, however, showed resilience with a slight increase in adjusted EBITDA to $1.6 billion from $1.5 billion, driven by higher rates and processing volumes.
Strategic Moves and Capital Allocation
Marathon Petroleum has been proactive in its capital return strategy. In Q1 2024, the firm returned approximately $2.5 billion to shareholders, including $2.2 billion through share repurchases and $299 million in dividends. Furthermore, an additional $5 billion share repurchase authorization was announced, underscoring the company's commitment to delivering value to its shareholders.
On the strategic front, MPC is investing in infrastructure upgrades and expansions, such as the multi-year project at its Los Angeles refinery and a new distillate hydrotreater at the Galveston Bay refinery. These projects are aimed at enhancing efficiency and productivity to support long-term growth.
Looking Ahead
For the second quarter of 2024, Marathon anticipates continued operational efficiency improvements, with refining operating costs projected at $4.95 per barrel and total refinery throughputs expected to increase to 2,965 mbpd. The company remains focused on strategic growth initiatives, particularly in the midstream sector, to bolster its market position and financial performance.
Overall, while the first quarter of 2024 posed several challenges for Marathon Petroleum, particularly in terms of reduced earnings and operational disruptions due to maintenance activities, the company's strategic investments and robust capital return plan highlight its resilience and commitment to maintaining a strong financial foundation.
For further details on Marathon Petroleum's financial performance and strategic initiatives, interested parties can access the full earnings release and join the upcoming webcast on the company's website.
Explore the complete 8-K earnings release (here) from Marathon Petroleum Corp for further details.
This article first appeared on GuruFocus.
