Marathon Petroleum Earnings: Profits Fall, but Remain Robust Enabling Increased Shareholder Returns

Marathon Petroleum's third-quarter adjusted earnings fell to $3.2 billion from $3.9 billion a year ago, exceeding market expectations. Refining market conditions weakened from record levels a year ago, but remain at relatively strong levels and well above our midcycle assumptions. Refining and marketing operating income fell to $3.8 billion from $4.6 billion the year before on weaker realized refining margins, which fell to $26.16/barrel from $30.21/bbl. Costs fell to $5.14/bbl from $5.63/bbl last year on lower energy costs. Capture utilization rates slipped to 93% during the quarter on secondary product headwinds and unplanned downtime that offset the benefits of improvements in commercial operations. However, nothing structurally occurred that should impede a recovery in future quarters.