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HS

HF Sinclair Corp (DINO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was a clear beat: revenue $7.251B and adjusted EPS $2.44 exceeded S&P consensus of $7.09B and $1.86, respectively; adjusted EBITDA was $870M, driven by stronger adjusted refinery gross margins and EPA small refinery exemptions (SREs). Revenue and EPS actuals: $7.251B and $2.44; consensus: $7.090B* and $1.864* .
  • Refining throughput and capture improved sequentially; consolidated adjusted refinery gross margin per produced barrel sold rose to $19.16 from $16.50 in Q2 and $9.12 in Q1, while operating expense per throughput barrel fell to $7.12, a record low cited by management .
  • Capital returns accelerated: $254M returned via $166M buybacks and $94M dividends; cash from operations was $809M and cash balance reached $1.451B at quarter-end; dividend maintained at $0.50 per share .
  • Guidance: Q4 crude runs guided to 550–590 kbpd reflecting Puget Sound turnaround; FY2025 sustaining capex reiterated at ~$775M and growth capex at ~$100M; pipeline expansion (PADD 4/5) under evaluation with Phase 1 targeted online in 2028, potential up to 150 kbpd incremental supply .
  • Potential stock catalysts: visibility on SRE benefits, continued margin capture in distillates, execution on Puget Sound projects and PADD 4/5 midstream expansion, and sustained capital return framework (50%+ of net income over time per management) .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EPS and revenue beat Street; adjusted EPS $2.44 vs $1.86* and revenue $7.251B vs $7.090B*, with adjusted EBITDA $870M; CEO highlighted “measurable improvement in throughput, capture and reductions in operating costs” .
  • Refining performance improved: adjusted refinery gross margin $19.16 per barrel (Q3) vs $16.50 (Q2) and $9.12 (Q1); operating expense per throughput barrel fell to $7.12; management called out record low operating expense per barrel and progress on capture .
  • Marketing strength: EBITDA hit a record $29M; adjusted gross margin of $0.11/gal; continued network growth with 1,705 branded sites at quarter-end (up YoY) and more than 130 sites signed to come online next 6–12 months .

What Went Wrong

  • Renewables segment loss before interest and taxes widened to $(55)M; adjusted EBITDA was $(13)M with sales volumes down to 57M gallons; adjusted margin per gallon slipped to $0.18 from $0.36 in Q2; management expects incremental PTC capture in Q4 .
  • Lubricants & Specialties EBITDA modestly improved to $78M but was “partially offset by an increase in operating expenses”; FIFO benefits helped; volumes roughly flat YoY .
  • Midstream throughput volumes declined YoY across pipelines (total 2.064M bpd vs 2.100M), though EBITDA rose to $114M on lower operating costs; throughput softness flagged as a headwind .

Financial Results

Consolidated Results (Quarterly trend)

MetricQ1 2025Q2 2025Q3 2025
Sales and other revenues ($USD Billions)$6.370 $6.784 $7.251
GAAP Diluted EPS ($)$(0.02) $1.10 $2.15
Adjusted EPS ($)$(0.27) $1.70 $2.44
EBITDA ($USD Millions)$262 $516 $796
Adjusted EBITDA ($USD Millions)$201 $665 $870

Actual vs S&P Global Consensus (Q3 2025)

MetricConsensus*Actual
Revenue ($USD Billions)$7.090*$7.251
Primary EPS ($)$1.864*$2.44
EBITDA ($USD Millions)$711*$796

Values retrieved from S&P Global*.

Segment EBITDA (YoY)

SegmentQ3 2024Q3 2025
Refining EBITDA ($MM)$(89) $615
Renewables EBITDA ($MM)$(2) $(33)
Marketing EBITDA ($MM)$22 $29
Lubricants & Specialties EBITDA ($MM)$76 $78
Midstream EBITDA ($MM)$96 $114

KPIs and Operating Metrics

KPIQ1 2025Q2 2025Q3 2025
Consolidated crude charge (BPD)606,140 615,930 639,050
Refinery utilization (%)89.4% 90.8% 94.3%
Adjusted refinery gross margin ($/bbl)$9.12 $16.50 $19.16
Operating expense per throughput barrel ($/bbl)$7.95 $7.32 $7.12
Marketing branded sites (period-end)1,664 1,719 1,705
Marketing volumes (k gallons)293,865 337,147 360,482
Adjusted marketing gross margin ($/gal)$0.12 $0.10 $0.11
Renewables volumes (k gallons)44,464 54,786 57,159
Adjusted renewables gross margin ($/gal)$0.16 $0.36 $0.18
Cash and cash equivalents ($MM)$547 $874 $1,451
Total debt ($MM)$2,676 $2,677 $2,768

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Crude runs (kbpd)Q4 2025—550–590 New/Turnaround-driven
Sustaining capital ($MM)FY 2025~$775 (management “still expect”) ~$775 Maintained
Growth capital ($MM)FY 2025~$100 (management “still expect”) ~$100 Maintained
Dividend per share ($/quarter)Recurring$0.50 (Q2 2025) $0.50 (declared for Q3) Maintained
Midstream expansion (Phase 1)Target online—2028 (35 kbpd to Nevada) New evaluation
Total potential expansionMulti-phase—Up to 150 kbpd incremental supply New evaluation

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Small Refinery Exemptions (SREs)Not highlighted in Q2/Q1 releasesSRE benefit: ~$115M to cost of sales and ~$56M revenue; mgmt sees future upside Newly positive driver
Distillate/Jet margin captureQ2: Adjusted refinery gross margin $16.50/bbl; Q1: $9.12/bbl “Max diesel mode,” record jet premium, strong cracks; capture improving Improving
Puget Sound projectsNot detailed in Q2/Q1 PRsCARB gasoline project completed; jet project announced (post-turnaround in Q4) Flexibility rising
Midstream expansion (PADD 4/5)Not present in Q2/Q1 PRsEvaluating multi-phase expansion; Phase 1 35 kbpd by 2028; up to 150 kbpd over time Strategic growth optionality
Renewables PTCQ1: unable to recognize PTC; Q2: began partial recognition Recognized more PTC in Q3; expect more in Q4 Improving recognition
Capital returns/payoutDividends $0.50 in Q1/Q2 $254M returned; reiterate minimum 50% payout of net income over time Consistent/strong

Management Commentary

  • CEO framing: “strong third quarter results are underpinned by the measurable improvement in operating and commercial performance including the continued increases in refining throughput, capture and reductions in operating costs” .
  • SRE detail: “$115 million… directly a result of the granting of the SREs… impacts cost of sales… roughly translates to ~$0.47 EPS… $56 million is additive… more of an indirect benefit… buying and selling RINs” .
  • Strategic expansion: Proposed multi-phased projects “projected to enable incremental supply of up to 150,000 barrels a day… Phase 1… 35,000 barrels per day… targeted to be online in 2028” .
  • Cost discipline: “record low operating expense of $7.12 per throughput barrel… crossing our near term goal of $7.25 per barrel” .
  • Capital allocation: “We look at [50% payout] as a minimum payout ratio… any excess cash flow… our target is to return to the shareholders” .

Q&A Highlights

  • SRE mechanics and sustainability: Management clarified the $115M cost-of-sales credit was cumulative recovery; $56M revenue was trading optimization; not viewed as one-time if SREs persist; EPS impact of ~$0.47 and ~$0.23, respectively .
  • Q4 operations guidance: Crude runs guided to 550–590 kbpd due to Puget Sound turnaround; some maintenance shifted into Q4’s lower margin environment .
  • Midstream expansion financing/tariffs: Multiple financing avenues considered; Phase 1 likely supported largely by equity barrels; FID anticipated by mid-2026; long-term reversal/expansion of Medicine Bow pipeline discussed .
  • Lubricants strategy and M&A: Focus on forward integration into finished/specialty products; exploring bolt-ons; management aims to re-rate the business to higher multiples over time .
  • Return of capital trajectory: Cash build in Q3 not to be stockpiled; expect more capital returns; reiteration of minimum 50% payout framework .

Estimates Context

  • Q3 2025 beats vs consensus: adjusted EPS $2.44 vs $1.864*, revenue $7.251B vs $7.090B*, EBITDA $796M vs $711M*. Estimate breadth: EPS 13 estimates, revenue 8 estimates*. Street likely to revise higher for FY/Q4 given improved capture, SRE recognition and Q4 crude run guidance .
    Values retrieved from S&P Global*.

Consensus vs Actual Detail (Q1–Q3 2025)

MetricQ1 2025 Consensus*Q1 2025 ActualQ2 2025 Consensus*Q2 2025 ActualQ3 2025 Consensus*Q3 2025 Actual
Primary EPS ($)(0.414)*(0.27) 1.078*1.70 1.864*2.44
Revenue ($MM)6,791*6,370 6,964*6,784 7,090*7,251
EBITDA ($MM)135*262 503*516 711*796

Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Beat and momentum: Q3 delivered a clean beat vs consensus on EPS and revenue with sequential improvements in capture and costs; distillate/jet strength remains supportive into Q4/Q1 .
  • Structural upside from SREs and operations: SRE recovery and RIN optimization boosted results; management expects potential ongoing benefits while focusing on reliability and mix optimization (“max diesel mode”) .
  • Capital deployment: Strong FCF ($809M CFO) and $254M returns; minimum 50% payout of net income over time reiterated; dividend stable at $0.50 .
  • 2026 setup: Turnarounds peaked in 2024; sustaining capex expected lower in 2026; potential widening of WCS/WTI diffs seen as capture tailwind next year .
  • Strategic optionality: Puget Sound projects enhance CARB/jet flexibility; PADD 4/5 expansion (Phase 1 by 2028) leverages equity barrels and existing infrastructure—lower cost and faster implementation potential vs peers .
  • Watch renewables normalization: PTC capture improving; monitor margin per gallon and volumes in Q4 to gauge trajectory .
  • Near-term trading lens: Focus on distillate cracks, SRE policy updates, Q4 crude run execution amid turnaround, and any incremental capital return announcements.