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Despite oil price decline, Marathon Petroleum saw 19% profit growth in 2014

FINDLAY – Marathon Petroleum Corp. bucked declining crude oil prices and on Wednesday reported a 2014 profit of $2.52 billion, or $8.78 per share, up 19 percent from profits of $2.11 billion, or $6.64 per share the previous year.

For the fourth quarter, the Findlay-based refining and marketing company’s profit was $798 million, or $2.86 per share, compared with $626 million, or $2.07 per share in the fourth quarter of 2013.

Led by its Speedway gas station unit, revenues for the year were $97.8 billion, compared with $100.2 billion in 2013. For the quarter, revenues totaled $22.2 billion, down from $24.9 billion in the fourth quarter of 2013.

“MPC had a strong fourth quarter, completing another milestone year in our history,” Marathon President and Chief Executive Officer Gary R. Heminger said. He said the company’s refining and marketing segment managed to achieve income from operations of $3.61 billion for 2014 while still performing the largest series of planned refinery-maintenance projects in company history.

“Our achievements, such as the acquisition of Hess’ retail operations and the acceleration of MPLX’s growth, underscore our commitment to grow higher-value, stable cash-flow segments of the business while optimizing our refining system for strong returns,” he said.

Marathon’s Speedway segment reported record earnings of $273 million for the quarter. During the fourth quarter, the newly acquired Hess locations contributed income of approximately $118 million. “Speedway performed remarkably while transitioning these new locations to the Speedway brand,” Mr. Heminger said. A total of 134 of the 1,245 acquired stores had been converted as of Jan. 31, he added.

In related news, Marathon stays committed to drilling.

The CEO cited Marathon’s flexibility as a refiner — ability to process different types of crude oil — and as a marketer selling products at retail for achieving strong earnings despite falling crude oil prices and decreasing margins for refiners’ products.

Besides earnings, Marathon announced its 2015 capital budget of $2.53 billion on Wednesday. It will include $1.28 billion for the refining and marketing, $452 million for Speedway, and $659 million for pipeline transportation. On the New York Stock Exchange, Marathon shares closed at $96.24, up 42 cents.

At MPLX LP, Marathon’s gas pipeline subsidiary, earnings for 2014 were $121.3 million, or $1.55 per share, compared with $77.9 million, or $1.05 per share for 2013. For the fourth quarter of 2014, MPLX’s earnings were $29.2 million, or 38 cents per share, compared with $20.2 million, or 27 cents per share for same period in 2013.

“In MPLX’s second full year as a publicly traded partnership, we have reaffirmed our commitment to our unitholders by announcing plans to substantially accelerate growth of the partnership,” Mr. Heminger said.

In the fourth quarter of 2014, MPLX acquired from Marathon Petroleum an additional 30.5 percent interest in MPLX Pipe Line Holdings LP, increasing MPLX’s stake in the entity to 99.5 percent.

“This acquisition is an important first step in the execution of our strategy to accelerate MPLX’s growth. This transaction will help support an increased average annual distribution growth rate in the mid 20-percent range over the next five years. As part of this plan, we are targeting a year-over-year [dividend] growth of approximately 29 percent for the calendar year 2015,” Mr. Heminger said.

MPLX’s shares, also traded on the New York Stock Exchange, closed at $76.77, down $2.48.

 

This article was written by Jon Chavez from The Blade and was legally licensed through the NewsCred publisher network.

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