Marathon Petroleum (MPC) Tops Q2 EPS by 42c, Revenues Miss
Marathon Petroleum (NYSE: MPC) reported Q2 EPS of ($1.33), $0.42 better than the analyst estimate of ($1.75). Revenue for the quarter came in at $15.2 billion versus the consensus estimate of $18.88 billion.
- Reported second-quarter income of $9 million, or $0.01 per diluted share, including net pre-tax benefit of $1.4 billion; adjusted loss of $868 million, or $(1.33) per diluted share
- Announced agreement to sell Speedway in $21 billion all-cash transaction; estimated after-tax proceeds of $16.5 billion expected to be used to both strengthen the balance sheet and return capital to shareholders
- Indefinitely idling Gallup and Martinez refineries; evaluating strategic repositioning of Martinez to renewable diesel facility
- On track to deliver $1.4 billion of capital spending and at least $950 million of operating expense reductions
- Significant liquidity with $7.7 billion of available borrowing capacity at MPC
"Our second quarter results reflect a full three months of the challenges COVID has created for our business," said President and Chief Executive Officer Michael J. Hennigan. "We began April with demand at historic lows. Despite seeing some recovery during the quarter, demand for our products and services continues to be significantly depressed, particularly across the West Coast and Midwest.
"In response, we are executing on the actions we announced in May and are advancing the three strategic priorities which lay the foundation for our long-term success. First, we strengthened the competitive position of our assets with the decision to indefinitely idle our Gallup and Martinez refineries, and are evaluating strategic repositioning possibilities for Martinez. Second, we began implementing commercial strategy changes and I've been encouraged by the team's quick progress. And third, we lowered our capital spending and tightly managed our operating expenses. I'm confident we will meet the $950 million expense reduction target we previously announced for 2020. We are also implementing plans to structurally lower costs in 2021 and beyond."
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