REINEKE FORD   ||   NEWS UPDATES

UPDATE: Marathon Petroleum earned $2.17 billion last year

Marathon Petroleum Corp.’s profits declined 17 percent last quarter from a year earlier to $633 million, due mainly to smaller discounts on the crude it buys and higher refinery maintenance costs.

Earnings translated into $2.10 per diluted share, down from $2.26 per diluted share in the October-December quarter a year earlier.

For the full year, profit fell by 35 percent to $2.17 billion. Earnings per diluted share for 2013 were $6.84, down from $9.79 in 2012.

Findlay-based Marathon Petroleum buys crude and refines it into gasoline, diesel and other petroleum products, which it then sells. It also owns and operates Speedway stations.

For years, Marathon and other midcontinent refiners have been exploiting a surplus of cheap, domestically produced oil, which boosted profit margins. The domestic oil is still cheap, just not as much so as it was last year.

Marathon’s gross profit per barrel of refined petroleum products fell to $15.69 last quarter from $16.34 a year earlier. For the entire year, it dropped to $13.24 from $17.85 in 2012.
Profit from refining and marketing operations dropped 15 percent to $971 million in the October-December quarter.

Midcontinent refiners like Marathon Petroleum are using cheaper material to produce the same gasoline and diesel as overseas refiners, giving them a huge competitive advantage, said Fadel Gheit, senior energy analyst for Oppenheimer.

Marathon wants to further grow its export business. This year it is completing a gasoline export tank project at Garyville which gives it added flexibility to blend gasoline for export, said Richard Bedell, senior vice president for refining.

It also is designing dock expansions at both Garyville and Galveston Bay, to be completed in 2015.

More export-related expansions could be on the way.

Comments

comments

About the Author