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Marathon Petroleum Corp (MPC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a net loss of $(74) million and diluted EPS of $(0.24) driven by the execution of the second-largest planned maintenance quarter in MPC’s history; however, revenue and EPS both beat Street expectations and Midstream grew 8% YoY, supporting $2.0B adjusted EBITDA .
  • Revenue came in at $31.85B vs consensus ~$30.15B* and EPS at $(0.24) vs consensus ~$(0.54)*; R&M margin was $13.38/bbl and utilization 89% with strong commercial capture of 104% as margins were seasonally weak but improved into Q2 .
  • Q2 outlook guides higher throughput (~2.945mbpd), lower operating costs ($5.30/bbl), and lower turnaround spend ($265mm), positioning for summer demand; dividend of $0.91 per share declared for June 10, 2025 .
  • Strategic catalysts: MPLX’s BANGL acquisition (to 100% ownership), Matterhorn stake increase, Traverse FID, and Permian/Northeast processing expansions, plus LA refinery modernization and Galveston Bay DHT project underpin long-term cash generation .

Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Midstream segment adjusted EBITDA rose ~8% YoY to $1.7B on higher throughputs and equity affiliate growth; MPC received $619mm MPLX distributions (+12.5% YoY) supporting capital returns .
  • Commercial excellence: capture of 104% in Q1 despite heavy turnarounds; “We believe that the capabilities we are building provide a sustainable advantage versus our peers” – CEO Maryann Mannen .
  • Renewable Diesel improved YoY (adjusted EBITDA $(42)mm vs $(90)mm), with Martinez utilization and margins improving; management expects operational improvements and regulatory actions to support recognition of 45Z credits from Q2 .

What Went Wrong

  • R&M adjusted EBITDA fell to $489mm ($1.91/bbl) vs $1.986B YoY, mainly on lower market crack spreads; R&M margin declined to $13.38/bbl from $19.35/bbl YoY .
  • Heavy planned maintenance impacted utilization (89%) and Gulf Coast volumes (from 97% in Q4 to 82% in Q1), contributing to sequentially lower consolidated adjusted EBITDA ($2.0B vs $2.12B in Q4) .
  • Renewable Diesel headwinds from regulatory credit changes and unplanned downtime pressured Q1 results; management is pursuing actions to realize 45Z value and optimize feedstocks but did not guide to profitability in Q2 .

Financial Results

Consolidated Performance vs Prior Periods and Estimates

MetricQ1 2024Q4 2024Q1 2025Q1 2025 Consensus
Revenue ($USD Billions)$33.21 $33.47 $31.85 $30.15*
Diluted EPS ($USD)$2.58 $1.15 $(0.24) $(0.54)*
R&M Margin ($/bbl)$19.35 $12.93 $13.38 —
Utilization (%)82 94 89 —

Values retrieved from S&P Global.*

Segment Adjusted EBITDA

Segment Adjusted EBITDA ($USD Millions)Q1 2024Q4 2024Q1 2025
Refining & Marketing$1,986 $559 $489
Midstream$1,589 $1,707 $1,720
Renewable Diesel$(90) $28 $(42)
Corporate$(228) $(189) $(210)
Adjusted EBITDA (Total)$3,281 $2,120 $1,975

KPIs

KPIQ1 2024Q4 2024Q1 2025
Net Refinery Throughput (mbpd)2,656 2,997 2,849
Refined Product Sales Volume (mbpd)3,242 3,747 3,446
Operating Costs ($/bbl)$6.06 $5.26 $5.74
Distribution Costs ($/bbl)$5.85 $5.34 $5.77
Capture (%)96 (Q3 2024) —104

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Refining Operating Costs ($/bbl)Q1 2025$5.70 Actual $5.74 Slightly above
R&M Planned Turnaround ($mm)Q1 2025$450 Actual $454 Slightly above
R&M D&A ($mm)Q1 2025$380 Actual $406 (R&M) Raised vs guide
Corporate Costs ($mm)Q1 2025$220 Actual $210 Lower than guide
Throughputs (Total mbpd)Q1 20252,770 Actual Net 2,849 Above guide
Refining Operating Costs ($/bbl)Q2 2025$5.70 (prior Q1 guide) $5.30 Lowered
Distribution Costs ($mm)Q2 2025$1,525 (unchanged) $1,525 Maintained
R&M Planned Turnaround ($mm)Q2 2025$450 (prior Q1 guide) $265 Lowered
R&M D&A ($mm)Q2 2025$380 (prior Q1 guide) $410 Raised
Throughputs (Total mbpd)Q2 20252,770 (prior Q1 guide) 2,945 Raised
Corporate Costs ($mm)Q2 2025$220 $220 Maintained
DividendQ2 2025—$0.91/share payable Jun 10, 2025 Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Commercial captureQ3: capture 96% on specialty products execution ; Q4 typically strong capture seasonality Capture 104% despite heavy turnarounds; “sustainable advantage” Improving
Demand/marginsQ3: volatile cracks; utilization 94% Seasonal uptick; margins ~$4/bbl better QoQ; throughput guided to 94% utilization in Q2 Improving into summer
West Coast strategyQ3: LA capex ~20% IRR; competitiveness amid closures LA modernization near completion; regulatory engagement; imports add volatility Structural advantage maintained
Midstream growthQ4: fractionators/LPG terminal; 12.5% MPLX distribution raise BANGL to 100%; Traverse FID; Matterhorn stake; secretariat/Harmon Creek expansions Accretive, durable cash flows
Heavy crude spreads—OPEC volume acceleration likely widens light-heavy spreads; Canadian discounts expected to improve into Q4 Favorable
Renewable dieselQ4: new segment established; Martinez ramp Regulatory credits headwind; actions to realize 45Z from Q2; operational optimization Operationally improving; regulatory uncertain
Capital returns & balance sheetQ3: $1B minimum cash; peer-leading buybacks; MPLX covers dividend/capex $1.3B returned in Q1; maintain ~$7B debt comfort; not using debt for buybacks Sustained discipline

Management Commentary

  • “Our Midstream business delivered an 8% increase in segment adjusted EBITDA over the prior year… For our refining business, we are positioned to meet summer demand as seasonal trends are expected to improve margins” – CEO Maryann Mannen .
  • “Adjusted EBITDA for the quarter was approximately $2 billion… capture of 104% was driven by solid commercial execution” – CFO John Quaid .
  • “We are nearing completion of approximately $700 million in infrastructure improvements [Los Angeles]… intended to strengthen the competitiveness… and position us to be one of the most cost competitive players in the region” – CEO Maryann Mannen .
  • “We believe MPLX is well positioned… especially as demand increases for natural gas-powered electricity… we can lead peers in capital returns through all parts of the cycle” – CEO Maryann Mannen .

Q&A Highlights

  • Demand/margins: Management sees steady gasoline demand and growth in diesel/jet; margins are ~$4/bbl better QoQ with regional improvements (Mid-Con +$6, Gulf Coast +$3, West Coast +$5) supporting Q2 utilization of ~94% .
  • West Coast/regulation: LA investment enhances reliability/efficiency and NOx compliance; imports from Asia add volatility but MPC’s integrated asset base remains advantaged; potential closures create product and feedstock tailwinds (TMX/AMS/SJV) .
  • Balance sheet/capital returns: MPC targets ~$7B gross debt and ~$1B minimum cash, with MPLX distributions covering dividend and standalone capex; will not increase debt for buybacks .
  • Heavy crude spreads: OPEC supply acceleration and expected Canadian discounts into Q4 favor MPC as a large heavy refiner across regions .
  • Renewable diesel: Operational actions and feedstock optimization underway; aiming to realize 45Z credits starting Q2; profitability not guided given regulatory uncertainty .

Estimates Context

  • EPS: Actual $(0.24) vs consensus ~$(0.54)* → beat by ~$0.30; lower loss than expected as Midstream strength and tax benefits offset refining headwinds .
  • Revenue: Actual $31.85B vs consensus ~$30.15B* → beat by ~$$1.70B; throughput and commercial capture supported top line despite lower crack spreads .
  • Number of estimates: EPS (16), Revenue (10) for Q1 2025; supports breadth of coverage.*

Values retrieved from S&P Global.*

Estimates Table

MetricQ1 2025 ActualQ1 2025 ConsensusBeat/Miss
Revenue ($USD Billions)$31.85 $30.15*Beat
Diluted EPS ($USD)$(0.24) $(0.54)*Beat

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Near-term: Q2 guidance implies higher throughput and lower operating costs/turnaround spend; with margins improving seasonally, set-up favors a sequential rebound in R&M profitability .
  • Midstream durability: BANGL, Matterhorn, Traverse, and processing expansions underpin mid-single digit growth at MPLX and increasing distributions to MPC—supportive of sustained capital returns .
  • West Coast edge: LA modernization and structural short gasoline/jet markets, plus potential closures, enhance MPC’s regional competitiveness despite regulatory volatility .
  • Heavy crude exposure: Expected widening light-heavy differentials and Canadian discounts are tailwinds to margin capture given MPC’s heavy refining footprint .
  • Renewable diesel: Operational improvements should lift volumes; regulatory credit recognition (45Z) from Q2 is a swing factor—monitor CARB timelines and federal guidance .
  • Capital allocation: ~$1.3B returned in Q1 and $0.91 dividend declared; with MPLX distributions covering dividend and capex, buybacks likely continue through cycles .
  • Catalyst path: Summer driving season, Q2 execution vs guidance (throughput/costs), midstream deal closings (BANGL/Matterhorn), and LA project milestones could drive stock reaction .