Marathon Petroleum's Q3 Profit Beats, Boosts Share Buybacks by $5 Billion

Oil refiner Marathon Petroleum (MPC.N) reported its third-quarter earnings on Tuesday, beating Wall Street estimates on better-than-expected throughput and utilization rates even as global refining margins decline.

The Findlay, Ohio-based company announced an additional $5 billion share repurchase program, and now has $8.5 billion available under its share buyback authorization.

Marathon's shares rose nearly 4% to $150.29 at mid-afternoon.

"Refining margins were volatile in the third quarter as the market digested the implications of a light turnaround season, less seasonal supply interruptions than anticipated, and the uncertainties around global economic growth, particularly the pace within China," Chief Executive Maryann Mannen told analysts on a call on Tuesday. But the refiner is well positioned to perform in this dynamic market environment, she said.

Global oil refiners reported lower profitability, a downturn for an industry that had thrived after the pandemic ended.

The refiner's crude capacity utilization in the third quarter was about 94%, above the 90% it forecast in August. For the fourth quarter, Marathon plans to operate refineries at 90% of combined capacity of 2.95 million bpd.

Total throughput, or the amount of crude processed through refineries, of 3 million barrels per day (bpd) was also above the company's prior expectation of 2.84 million bpd.

Marathon earned $1.87 per share in the third quarter, compared with the average analyst estimate of 98 cents, data compiled by LSEG showed.

The company performed better than forecast on distribution costs, refinery turnarounds, and throughputs, which totaled about a $202 million tailwind versus the brokerage's modeling, Tudor, Pickering, Holt & Co analyst Matthew Blair said.

Adjusted core earnings at Marathon's midstream unit rose 5.8% to $1.6 billion in the third quarter, primarily driven by higher rates and volumes transported.

Marathon said its third-quarter refining and marketing margin was $14.35 per barrel, compared with $26.16 per barrel a year earlier.

Net income attributable to the company in the third quarter dropped 82% to $622 million, from last year.

Rivals Valero Energy (VLO.N) and Phillips 66 (PSX.N) also reported lower third-quarter profits, despite beating analysts' estimates.

(Reporting by Nicole Jao and Arunima Kumar; Editing by Shounak Dasgupta and Richard Chang)