Marathon Petroleum Profit Soared as Refining Margins More Than Doubled

Marathon Petroleum earned $7.45 billion in the third quarter as refining margins more than doubled from a year earlier.

Marathon Petroleum runs the largest refining system in the United States. It also controls MPLX, a pipeline and processing partnership. The third quarter, ended September 30, caught fuel margins at an unusually strong level.

Reported net income attributable to MPC was $7.447 billion, or $26.59 a share on a diluted basis. A year earlier it was $1.370 billion, or $4.51 a share. The quarter's profit was more than five times the year-earlier level, a TickerGrove calculation.

Adjusted net income was $7.541 billion, or $26.93 a share, against $915 million, or $3.01, a year earlier. Adjusted figures strip out items the company calls one-time. Here the only adjustment was $123 million of tax and legal settlements, before tax.

Profit beat the one consensus frame carried

Adjusted earnings beat the Zacks Consensus Estimate of $25.74 a share. Zacks put the earnings surprise at 4.62 percent. Other frames circulating Tuesday differed; only the Zacks frame is carried, labeled at the point of use.

Total revenues and other income were $56.487 billion, up from $35.849 billion a year earlier. Sales and other operating revenues were $56.032 billion of that total. Zacks said revenues surpassed its consensus estimate by 68.30 percent.

Refining did the heavy lifting

Refining and Marketing segment adjusted EBITDA was $9.895 billion, against $1.762 billion a year earlier. Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization, with some items removed. The segment supplied most of the company's $11.729 billion total, which compared with $3.206 billion.

The refining margin was $45.70 a barrel, up from $17.60 a year earlier. That is an increase of about 160 percent, a TickerGrove calculation. The company said higher market crack spreads in all regions drove the result. A crack spread is the gap between crude costs and the prices fuels fetch.

Crude capacity utilization reached 100 percent, up from 95 percent. Net refinery throughput was 3.150 million barrels a day, up from 3.005 million. Refining operating costs were nearly flat, at $5.60 a barrel against $5.59.

"Our value chain capabilities remain a defining advantage for us, capturing opportunities to enhance margins across dynamic market conditions," chairman, president and chief executive Maryann Mannen said. She credited planning, commercial and operational execution for the cash generation.

Two smaller segments moved the right way

Midstream segment adjusted EBITDA was $1.882 billion, up from $1.709 billion. The company credited higher rates and throughputs, more income from equity affiliates, and acquisition growth. A sale of non-core gathering and processing assets and higher operating costs partly offset those gains.

Renewable Diesel segment adjusted EBITDA was $254 million. A year earlier the segment lost $56 million on the same measure. The company cited a stronger margin environment, improved regulatory credit values, and higher throughputs.

Corporate costs rose to $328 million, from $238 million, mainly on incentive compensation. The refining result excludes $294 million of planned turnaround costs. Turnarounds are scheduled refinery maintenance shutdowns.

A $4.2 billion sale reshapes the map

MPC announced the divestiture of the St. Paul Park and Mandan refineries, inclusive of related midstream assets, for $4.2 billion. The release does not name the buyer. MPC will receive $3.45 billion of the proceeds.

MPC intends to reinvest its share mainly in the Gulf Coast, prioritizing opportunities that meet its return thresholds. The sale is an announced transaction, not a completed one.

MPLX will receive $750 million for the associated logistics assets. The company priced that share at nine times forecast 2027 adjusted EBITDA for those assets. MPLX expects to redeploy the cash toward growth in the Permian and Marcellus basins. The transaction is expected to close at the end of 2026.

Cash returns stepped up

The company returned $3.3 billion of capital to shareholders in the quarter. It also announced a 10 percent increase in its quarterly dividend. This release does not state the new per-share dividend amount.

At September 30, cash, cash equivalents and short-term investments totaled $13.6 billion. That total includes $1.3 billion of cash held at MPLX. Remaining buyback capacity was $3.1 billion before a new authorization.

The board approved an additional $5 billion buyback authorization. With it, capacity would have stood at $8.1 billion at September 30. MPLX raised its quarterly distribution by 12.5 percent, for the third straight year. MPC expects $3.1 billion of annual distributions from MPLX as a result.

The fourth quarter steps down from the peak

For the fourth quarter, the company guided total refinery throughput to 3.080 million barrels a day. That sits below the third quarter's 3.150 million. The guide assumes 2.830 million barrels a day of crude oil refined, plus other charge and blendstocks.

Refining operating costs are guided at $5.60 a barrel again. Planned turnaround costs are guided at $230 million. The outlook is the company's own guidance, announced with the results, not a reported outcome.

What remains unknown

What remains unknown starts with the buyer of the two refineries. The release gives the price, the split and the expected closing window. It does not name the counterparty or detail regulatory approvals and closing conditions.

How long refining margins near $45.70 a barrel can last is also unknown. The quarter's profit rests on market crack spreads, which the company does not control. The fourth-quarter guide already steps down from the peak.

The new dividend amount is a third unknown in this release. The company announced a 10 percent increase without stating the per-share figure here. A separate dividend declaration would settle the amount.

What to watch next

What to watch next is whether the divestiture closes at the end of 2026 on the announced terms. Watch for the buyer to be named and for any regulatory conditions to surface. The Gulf Coast reinvestment plan is the other half of the trade.

Watch fourth-quarter refining margins against the $45.70 third-quarter level. Guided throughput of 3.080 million barrels a day leaves less volume to capture any margin strength. Buyback pace under the enlarged $8.1 billion authorization is the third test.