Marathon Petroleum Profit Tops Estimates on Robust Refining Margins

U.S. refiner Marathon Petroleum on Tuesday posted a first-quarter profit above Wall Street estimates buoyed by strong refining margins, as demand for fuel and refined products recovered to near pre-pandemic levels amid tight supplies.

Shares of the company rose 3.8% to $92.48.

Global fuel demand has recovered, while Western sanctions on Russia following its invasion of Ukraine have tightened crude oil supplies worldwide.

"Year-over-year, demand trends have been, for the most part, positive and the market seems to have reached a post-COVID point of stability," Chief Executive Officer Michael Hennigan said on a post-earnings call.

The company expects the U.S. refining system running at higher utilization rates in the coming quarters to meet rising demand.

Overall product supplied, a proxy for demand, stood at 19.8 million barrels per day (bpd) in the fourth week of April, near pre-pandemic trends, according to U.S. Energy Information Administration data.

Marathon said its refining and marketing margins jumped nearly 51% to $15.31 per barrel in the quarter ended March 31. 

Crude capacity utilization was 91%, resulting in total throughput of 2.8 million bpd, compared with an 83% utilization and total throughput of 2.6 million bpd a year earlier.

For the current quarter, it expects throughput of 2.9 million bpd.

The refining and marketing segment's profit from operations stood at $768 million, compared with a loss of $598 million last year.

The Findlay, Ohio-based refiner said net profit came in at $845 million, or $1.49 per share, for the reported quarter, compared with a loss of $242 million, or 37 cents per share, a year earlier.

Analysts were expecting a profit of $1.11 per share, according to Refintiv IBES.

Marathon's results followed strong earnings from other energy companies, including Valero Energy Corp and Phillips 66.

(Reporting by Arunima Kumar; Editing by Sriraj Kalluvila, Rashmi Aich and Shailesh Kuber)