Marathon Petroleum Earnings
Marathon Petroleum Corporation (NYSE: MPC) recently released its financial results for the fourth quarter of 2024, reflecting an arduous quarter with substantial declines in several key financial metrics. The company posted a net income attributable to MPC of $371 million, down significantly from $1.5 billion in Q4 2023, marking a year-over-year drop of 75.3%. Moreover, earnings per diluted share also plummeted by 70.1%, settling at $1.15 compared to $3.84 in the previous year. Adjusted measures tell a similar story, with adjusted net income at $249 million, down 83.4%, and adjusted earnings per diluted share at $0.77, an 80.7% decrease from last year's figures.
Financial Metrics
| Metric | Q4 2024 | Q4 2023 | Year-over-Year Change (%) |
|---|---|---|---|
| Net Income attributable to MPC | $371 million | $1.5 billion | -75.3% |
| Earnings per Diluted Share | $1.15 | $3.84 | -70.1% |
| Adjusted Net Income | $249 million | $1.5 billion | -83.4% |
| Adjusted Earnings per Diluted Share | $0.77 | $3.98 | -80.7% |
| Adjusted EBITDA | $2.1 billion | $3.6 billion | -41.7% |
Interpretation
The severe downturn in earnings metrics is attributed primarily to decreased market crack spreads, a significant component influencing the profit margins of refining and marketing activities. Such declines have substantially affected the company's profitability, indicating that the market conditions have not been favorable for Marathon Petroleum's core business segments.
Revenue Breakdown
Segment Revenue Performance
| Segment | Q4 2024 EBITDA (million) | Q4 2023 EBITDA (million) | Performance Interpretation |
|---|---|---|---|
| Refining & Marketing (R&M) | $559 | $2.2 billion | Significant decline due to reduced market crack spreads |
| Midstream | $1.7 billion | $1.6 billion | Slight growth driven by increased rates and volumes |
| Renewable Diesel | $28 | $(47) | Improvement from increased utilization at Martinez facility |
Analysis
The revenue performance across segments presents a mixed picture. The Refining & Marketing segment notably struggled, with EBITDA plunging to $559 million from the previous year's $2.2 billion. This drop highlights the impact of unfavorable pricing and market conditions. On a positive note, the Renewable Diesel segment showed marked improvements, moving from a negative EBITDA in the previous year to $28 million in Q4 2024. This growth is attributed to enhanced operational efficiencies and strategic investments, particularly at the Martinez facility.
Key Developments
Marathon Petroleum's strategic maneuvers this quarter included establishing a new Renewable Diesel segment to improve peer comparability. Through strategic partnerships and investments, particularly in the Gulf Coast and Permian Basin regions, the company aims to bolster its operational capabilities and expand its profitability potential. Additionally, the company returned $10.2 billion of capital to shareholders throughout 2024, signifying a continued commitment to shareholder value.
Comments from Company Officers
Maryann Mannen, CEO of Marathon Petroleum, emphasized the company's strong operational performance, acknowledging its role in generating significant capital for substantial shareholder returns. The execution of a robust Midstream strategy resulted in a 6% growth in segment adjusted EBITDA, positioning MPC favorably despite the challenges in the refining sector. Looking ahead, Mannen highlighted MPLX distributions that are expected to support MPC dividends and meet standalone capital requirements in 2025.
Dividends and Share Repurchases
Marathon Petroleum's aggressive capital return strategy was evident through its substantial dividends and share repurchase programs. In Q4 2024 alone, approximately $1.6 billion was distributed to shareholders, comprising $1.3 billion in share repurchases and $292 million in dividends. Moreover, the company still retains $7.8 billion available under its share repurchase program, suggesting continued strong shareholder reinvestment in future periods.
Marathon Petroleum Stock Forecast
Considering Marathon Petroleum's recent financial performance, strategic initiatives, and market conditions, stock price projections for the near term reflect cautious optimism. With the current stock price at $147 and an after-event price change of approximately 0.89%, the stock forecast suggests a high-end projection reaching around $152, contingent on market recovery and continued strategic execution. Conversely, a low-end projection might see the stock retreat to $140, reflecting ongoing market volatilities and unresolved profit margin pressures in the refining business.
In conclusion, despite notable declines in financial metrics, Marathon Petroleum emphasizes its commitment to strategic investments and shareholder value. The focus on renewable initiatives and capital allocation strategies signals a comprehensive approach to navigating future market conditions, aiming for growth and resilience in 2025.
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