Marathon Petroleum Profit Soars on Refining Margins

Profit Exceeds Analyst Expectations

Marathon Petroleum reported a significant fourth-quarter profit that surpassed Wall Street estimates, driven primarily by robust refining margins. The company posted an adjusted profit of $4.07 per share for the three months ending December 31, comfortably beating the analysts' average estimate of $2.88 per share, according to data from LSEG.

Market Overview: Margin Rebound

The performance reflects a broader rebound in U.S. fuel maker margins, which had previously hit multi-year lows in 2024. This recovery follows an earlier spike caused by global supply constrictions. In the fourth quarter, U.S. refinery margins, as measured by the 3-2-1 crack spread, saw an average increase of approximately 45% compared to the same period a year earlier.

Financial Impact and Segment Performance

Marathon's refining and marketing margin climbed to $18.65 per barrel, a substantial increase from $12.93 per barrel a year ago. This directly translated into stronger segment performance, with the refining and marketing division posting a quarterly core profit of about $2 billion, up from $559 million in the prior-year period.

Summary and Outlook

The strong quarterly results highlight the company's ability to capitalize on favorable market conditions. The key factor moving forward will be the sustainability of these high refining margins amid evolving global energy supply and demand dynamics.

FAQ

Q: What was Marathon Petroleum's adjusted profit for the fourth quarter?
A: The company reported an adjusted profit of $4.07 per share, exceeding the analyst consensus of $2.88 per share.

Q: What was the main driver behind the strong earnings?
A: The primary driver was a significant increase in refining margins, which rose to $18.65 per barrel.

Q: How much did the refining segment's profit grow?
A: The refining and marketing segment's core profit grew to approximately $2 billion, compared with $559 million a year earlier.

Source: Reuters via Investing.com