Marathon Petroleum's Q4 Earnings: A Mixed Bag of Results and Strategic Moves

Marathon Petroleum Corporation (MPC) reported its fourth-quarter 2024 earnings on February 4, 2025, providing a mixed bag of results and strategic moves that highlight the company's resilience and adaptability in the face of industry challenges. The company's net income attributable to MPC for the quarter was $371 million, or $1.15 per diluted share, compared to $1.5 billion, or $3.84 per diluted share, in the fourth quarter of 2023. Adjusted net income was $249 million, or $0.77 per adjusted diluted share, down from $1.5 billion, or $3.98 per diluted share, in the same period last year.

The company's adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) for the fourth quarter of 2024 were $2.1 billion, compared to $3.6 billion in the fourth quarter of 2023. For the full year 2024, net income attributable to MPC was $3.4 billion, or $10.08 per diluted share, compared to $9.7 billion, or $23.63 per diluted share, in 2023. Adjusted net income for the full year was $3.3 billion, or $9.51 per diluted share, down from $9.7 billion, or $23.63 per diluted share, in 2023.

MPC's strong cash flow generation in 2024, driven by operational excellence, commercial performance, and profitability per barrel, enabled the company to return $10.2 billion to shareholders through share repurchases and dividends. The company's Midstream segment delivered segment adjusted EBITDA growth of 6% in 2024, further supporting its commitment to peer-leading capital return.

In the fourth quarter of 2024, MPC established a Renewable Diesel segment, which includes renewable diesel activities and assets historically reported in the Refining & Marketing segment. This change in reportable segments enhances the comparability of MPC's reporting with direct peers who report both a refining and renewable diesel segment. The Renewable Diesel segment includes the Dickinson, North Dakota renewables facility, the Martinez Renewable Fuels joint venture, and other renewable diesel activities and assets.

MPC's Midstream Gulf Coast NGL strategy progressed with MPLX's announcement of a fractionation complex and export terminal, further positioning the company to capitalize on growing global demand for U.S. NGL exports. The company's strong liquidity position, with $3.2 billion in cash and equivalents, including $1.5 billion at MPLX, plus $5 billion available on its credit facility, enables it to execute its strategic plans and maintain financial flexibility.

In conclusion, Marathon Petroleum's Q4 earnings snapshot reveals a complex picture of strategic adaptation amid challenging market conditions. The 75% year-over-year decline in net income reflects industry-wide margin compression, yet several positive developments warrant attention. The company's operational excellence, strategic reorganization, Midstream Gulf Coast NGL strategy, and MPLX's expansion plans position MPC for significant growth and value creation in the long term. As the company continues to navigate industry challenges and capitalize on growth opportunities, investors should closely monitor its progress and potential for shareholder returns.