Marathon Petroleum profits dip more than 75 percent
Wednesday February 3, 2016
Marathon Petroleum Corp. saw its quarterly earnings dip by nearly 80 percent from 2014, but the refining giant still saw a net income gain for the full year.
The Ohio-based refining and pipeline company reported a $168 million net income gain for the final three months of the year, down from $805 million. For the year, Marathon's net income grew to $2.87 billion from $2.55 billion.
Refining companies thrived for much of 2015 thanks to strong fuel demand and cheap feedstock prices, but the margins shrunk somewhat in the fourth quarter as gasoline prices kept plummeting and seasonal demand shrunk. Marathon's quarterly earnings also were hit by a one-time charge of $370 million to reflect the lowered value of some of its inventory.
Marathon President and CEO Gary Heminger praised his company's full-year performance.
In addition to our strong financial and operational results, we also made tremendous progress on our strategic objectives of growing the more stable cash-flow segments of our business and enhancing our refining margins,†Heminger added.
We remain very encouraged by the environment for U.S. refiners,†he said in a conference call.
Marathon is one of the largest Texas refiners and it plans to invest $2 billion during the next five years to upgrade its Galveston Bay refinery as part of its South Texas Asset Repositioning, or STAR, program.
The investments planned as part of the STAR program are intended to increase production of higher-value products and improve the facility's reliability, as well as increase processing capacity,†Heminger stated. These high-return investments will also fully integrate our Galveston Bay refinery with our Texas City refinery, making it the second-largest refinery in the U.S.â€
The fourth quarter also saw Marathon acquire Denver-based MarkWest Energy Partners after. The difficult deal was made after offering multiple cash sweeteners to convince MarkWest shareholders to sign off on the deal.
MarkWest will become part of MPLX, which is Marathon's pipeline spin off. The transaction is expected to close in the second quarter of the year.
MPLX is a master-limited partnership that passes on most of its earnings to unit holders in the...