HF Sinclair beats Q3 profit estimate on higher sales, midstream strength
Adds details throughout
Oct 31 (Reuters) -Refiner HF Sinclair DINO.N beat analyst estimates for third-quarter profit as higher fuel sales and a strong midstream segment offset a margin slump, particularly in the West and Mid-Continent regions.
Shares of the company were up 1.8% premarket.
The Dallas-based companyjoins rivals like Phillips 66 PSX.N and Valero VLO.N in beating analyst estimates but posting a drop in income.
Refiners globally have faced declining profitability amid soft consumer and industrial demand, slowing economic growth, increasing electric vehicle adoption, and expanding global refining capacity.
U.S. refinery margins, measured by the 3-2-1 crack spread CL321-1=R, dipped to $14.28 in mid-September, the lowest since early 2021, reflecting lackluster fuel demand.
HF Sinclair's refinery gross margin dropped nearly 59% to $10.79 per produced barrel, leading to a loss of $75.9 million compared to a net income of $790.9 million a year earlier.
During the peak summer driving season in July and August, gasoline inventories decreased in six out of nine weeks of the third quarter, according to data from the U.S. Energy Information Administration, indicating a strong demand for fuel during this period.
In its marketing segment, HF Sinclair's core profit rose 4.7% to $22.1 million on higher margins. The midstream segment saw a 10.6% increase in core adjusted profit due to higher revenues from increased volumes and tariffs.
The company's refinery utilization averaged 101.2% in the quarter, compared with 88.8% last year, due to reducedturnaround activities.
This led to a 0.7% rise in throughput and a 3.2% increase in refined product sales year-over-year.
Excluding adjustments, HF Sinclair's earnings came in at 51 cents per share, well above analysts' estimates of 32 cents per share as per data from LSEG.
Reporting by Seher Dareen in Bengaluru: Editing by Tasim Zahid
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