Marathon Petroleum Tops Q4 Estimates Despite Lower Refining Margins

Marathon Petroleum Corporation (MPC) reported fourth-quarter results that topped analysts' estimates, despite a decline in refining margins. The company's adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) came in at $2.1 billion, compared with the consensus estimate of $1.9 billion. However, refining margins decreased to $12.93 per barrel in the fourth quarter of 2024, down from $17.81 per barrel in the same period in 2023.

The decrease in refining margins was primarily driven by lower market crack spreads, which are the difference between the price of refined products and the cost of crude oil. Market crack spreads are influenced by various factors such as crude oil prices, refined product prices, and regional demand. In the case of Marathon Petroleum, the decrease in market crack spreads led to a decline in refining margins. Additionally, the company's refining operating costs per barrel decreased to $5.26 in the fourth quarter of 2024 from $5.55 in the same period in 2023, indicating improved operational efficiency. However, this improvement was not sufficient to offset the impact of lower market crack spreads on refining margins.

Despite the lower refining margins, Marathon Petroleum's Midstream segment contributed to its total adjusted EBITDA growth of 6% in 2024. The Midstream segment delivered segment adjusted EBITDA of $1.7 billion in the fourth quarter of 2024, compared with $1.57 billion for the fourth quarter of 2023. This growth was driven by the execution of the company's Midstream strategy, which includes the announcement of a fractionation complex and export terminal by MPLX. The Midstream segment's adjusted EBITDA growth of 6% was a significant factor in the company's overall adjusted EBITDA growth for the year.

Looking ahead, Marathon Petroleum expects distributions from MPLX in 2025 to cover MPC's dividends and standalone capital outlook. This indicates that the Midstream segment is expected to continue contributing to the company's overall performance and capital return in the coming years. Additionally, Marathon Petroleum's commitment to peer-leading operational excellence, commercial performance, and profitability per barrel in each of the regions in which it operates suggests that the Midstream segment will remain a key driver of the company's growth and success.



In conclusion, Marathon Petroleum's fourth-quarter results demonstrated the company's ability to generate strong financial performance despite lower refining margins. The company's Midstream segment played a crucial role in driving overall adjusted EBITDA growth, and its commitment to operational excellence and profitability per barrel positions it well for continued success in the coming years. Investors should closely monitor Marathon Petroleum's progress as it continues to execute its Midstream strategy and capitalize on opportunities in the energy sector.