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Marathon Petroleum Corp (MPC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was materially weaker year-over-year on refining margins and per-barrel profitability, with diluted EPS at $1.15 and adjusted EPS at $0.77 as market crack spreads compressed and R&M EBITDA per barrel fell to $2.03; Midstream remained resilient and Renewable Diesel turned positive EBITDA .
  • Management underscored strategic momentum: MPLX distributions expected to fully fund MPC’s 2025 dividend and $1.25B standalone capex, and announced a Gulf Coast fractionation complex and a 400 kbpd LPG export terminal via ONEOK JV, reinforcing a “wellhead-to-water” NGL strategy .
  • Capital returned totaled $10.2B in 2024; Q4 buybacks were ~$1.3B and dividends ~$292M; year-end cash was $3.2B with $7.8B remaining repurchase authorization .
  • First-quarter 2025 guidance points to heavier turnaround ($450M) and lower throughput (2.77 mbpd) versus Q4 guidance levels, supporting a near-term margin/mix reset before seasonal improvement later in 2025 per management’s macro view .
  • Stock-relevant narrative catalysts: durability of MPLX cash flows covering dividend and capex, record exports and capture (119%) despite weaker cracks, and optionality to mitigate potential heavy crude tariff impacts; surprises included Renewable Diesel’s positive EBITDA and newly separated segment disclosure .

What Went Well and What Went Wrong

  • What Went Well
    • Midstream strength and durability: segment adjusted EBITDA rose to $1.7B in Q4; MPLX increased its quarterly distribution by 12.5% in 2024, and MPC expects 2025 MPLX distributions to cover MPC’s dividend and standalone capex (“We expect distributions from MPLX in 2025 will cover MPC’s dividend and standalone capital outlook”) .
    • Commercial execution and export strategy: management cited 119% capture with “records on volume and margin” in exports, plus strong asphalt execution supporting margin capture in Q4 .
    • Renewable Diesel segment positive EBITDA: $28M in Q4 driven by increased utilization at Martinez, and segment recast improves peer comparability .
  • What Went Wrong
    • Refining & Marketing compression: R&M adjusted EBITDA fell to $559M (vs. $2.248B in Q4’23), margin per barrel dropped to $12.93 (vs. $17.81), and EBITDA per barrel to $2.03 (vs. $8.36) on weaker crack spreads .
    • Earnings down sharply YoY: diluted EPS $1.15 and adjusted EPS $0.77 vs. $3.84 and $3.98 in Q4’23; adjusted EBITDA $2.1B vs. $3.6B .
    • Higher near-term maintenance burden: Q1’25 turnaround guidance is $450M versus Q4’24 guidance $285M, with throughput guided lower, indicating near-term utilization/margin headwinds .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Sales and other operating revenues ($USD Billions)$36.255 $35.107 $33.137
Diluted EPS ($)$3.84 $1.87 $1.15
Adjusted Diluted EPS ($)$3.98 $1.87 $0.77
Adjusted EBITDA ($USD Billions)$3.567 $2.485 $2.120
Segment Adjusted EBITDA ($USD Millions)Q4 2023Q4 2024
Refining & Marketing$2,248 $559
Midstream$1,570 $1,707
Renewable Diesel$(47) $28
R&M KPIsQ4 2023Q3 2024Q4 2024
R&M margin ($/bbl)$17.81 $14.35 $12.93
R&M EBITDA ($/bbl)$8.36 $3.82 $2.03
Refining operating costs ($/bbl)$5.55 $5.30 $5.26
Net refinery throughput (mbpd)2,922 2,991 2,997
Crude capacity utilization (%)91% 94% 94%
Capture (%)——119% (management)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Refining operating costs ($/bbl)Q4 2024 vs Q1 2025$5.50 (Q4’24 guide) $5.70 (Q1’25 guide) Raised
Distribution costs ($USD Millions)Q4 2024 vs Q1 2025$1,525 (Q4’24 guide) $1,525 (Q1’25 guide) Maintained
Refining planned turnaround ($USD Millions)Q4 2024 vs Q1 2025$285 (Q4’24 guide) $450 (Q1’25 guide) Raised
Depreciation & amortization ($USD Millions)Q4 2024 vs Q1 2025$475 (R&M, Q4’24 guide) $380 (R&M, Q1’25 guide) Lowered
Total refinery throughputs (mbpd)Q4 2024 vs Q1 20252,880 (Q4’24 guide) 2,770 (Q1’25 guide) Lowered
Corporate costs ($USD Millions)Q4 2024 vs Q1 2025$200 (Q4’24 guide) $220 (Q1’25 guide) Raised
Dividend per share ($)Q4 2024 vs Q1 2025$0.91 (increase announced Oct 30, 2024) $0.91 (declared Jan 24, 2025) Maintained
2025 MPC standalone capex ($USD Billions)FY 2025—$1.25 New disclosure
MPLX capex ($USD Billions)FY 2025—$2.0 New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Margin capture and exportsCapture 94%; gasoline-supported capture; strong exports tailwinds R&M margin $14.35/bbl; utilization 94% Capture 119% with record exports and strong asphalt execution Improving capture despite weaker cracks
Midstream “wellhead-to-water” strategyFID Blackcomb; BANGL ownership increase; durable MPLX distributions Midstream EBITDA ~up; durable growth profile FID on fractionation complex and 400 kbpd LPG export terminal (ONEOK JV); MPLX distributions cover MPC dividend and capex Expanding scope and cash coverage
Renewable DieselMartinez ramp to 75% capacity; target full capacity by YE RD not separately disclosed (pre-recast)Segment recast; EBITDA +$28M; Martinez at nameplate; focus on low-CI feedstocks Turned positive; operationally stabilizing
Tariffs/macroEnhanced mid-cycle view; utilization high; outlook constructive Demand steady; margin headwinds; macro balanced Heavy crude tariffs risk: optionality to pivot crude slate; limited utilization impact expected Active risk management/optionality
Capital returns$2.9B buybacks in Q2; dividend policy steady $3.0B returned; additional $5B buyback auth; dividend to $0.91 $1.6B returned in Q4; $7.8B remaining authorization; 2024 total $10.2B Continued high capital return
Turnarounds and costsFull-year ~$1.4B; Q3 guide $330M Q4 guide: op cost $5.50/bbl; turnaround $285M Q1’25 guide: op cost $5.70/bbl; turnaround $450M; throughput lower Near-term cost up; throughput down

Management Commentary

  • “In 2024, we generated net cash from operations of $8.7 billion, which enabled peer-leading capital return to shareholders of $10.2 billion… We expect distributions from MPLX in 2025 will cover MPC's dividends and standalone capital outlook” — CEO Maryann Mannen .
  • “Adjusted earnings per share of $0.77 for the fourth quarter… Adjusted EBITDA was approximately $2.1 billion… Capture of 119% in the fourth quarter” — CFO John Quaid .
  • “MPLX reached a significant milestone… Gulf Coast fractionation complex and export terminal… anticipated mid-teen returns” — CEO Maryann Mannen .
  • “We believe we’re in as good or better shape than anyone in the industry to absorb a tariff… pivot to alternative crudes because of our logistics capabilities” — Rick Hessling (Commercial) .

Q&A Highlights

  • Margin capture drivers: Export strategy delivered record volumes/margins; asphalt execution added uplift; capture reached 119% despite weaker cracks .
  • Heavy crude tariffs contingency: MPC’s integrated system can shift crude diet (e.g., Bakken/Rockies/Utica/Marcellus) to mitigate; minimal expected utilization impact .
  • MPLX distributions and buybacks: Distributions expected to cover MPC dividend and capex in 2025; potential for sustained distribution growth supporting higher buybacks at MPC over time .
  • West Coast dynamics: Integrated “refinery to retail” value chain, regulatory-compliant investment at Los Angeles, and competitive positioning despite regional challenges .
  • LPG export marketing: MPC to market 50% of terminal volumes; diversified contracting (term/spot, FOB/delivered) amid bullish global LPG demand (e.g., Chinese PDH) .
  • Renewable diesel outlook: Positive EBITDA with Martinez at nameplate; focus on advantaged low-CI feedstocks amid evolving policy/BTC dynamics .

Estimates Context

  • S&P Global Wall Street consensus estimates for Q4 2024 EPS and revenue were unavailable at the time of this analysis due to SPGI request limits; therefore, formal beat/miss vs consensus cannot be assessed. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Midstream (MPLX) is increasingly the cash backbone: distributions are expected to fully fund MPC’s dividend and standalone capex in 2025, reducing dependence on volatile refining cash flows .
  • Refining margin compression weighed on EPS; however, exceptional Q4 capture (119%) and record exports demonstrate structural commercial improvements that can partially offset weaker cracks .
  • Near-term headwinds: Q1’25 heavier turnaround ($450M) and lower throughput (2.77 mbpd) imply softer operating metrics before seasonal and macro improvements later in 2025 per management .
  • Strategic NGL build-out (fractionation + LPG export terminal) adds multi-year EBITDA potential and optionality across Gulf Coast assets; mid-teens returns targeted .
  • Renewable Diesel has turned a corner with positive EBITDA and full-nameplate operations; focus on low-CI feedstocks supports profitability under evolving regulatory frameworks .
  • Capital returns remain a core pillar: $10.2B returned in 2024; buybacks continue with $7.8B authorization remaining, and dividend at $0.91 per share maintained .
  • Tariff risk management: crude slate optionality and logistics connectivity should mitigate potential heavy crude import tariffs; execution advantage vs peers could emerge if disruptions occur .

Note: Non-GAAP adjustments materially impacted reported results (e.g., LIFO inventory credit, turnaround costs) — adjusted EPS $0.77 and adjusted EBITDA $2.12B reconcile the underlying operating performance .