FINDLAY — Marathon Petroleum Corp. on Thursday reported a $199 million profit, or 67 cents a share, for the first quarter of 2014, a 72 percent decrease from the same period a year ago when profits were $725 million, or $2.17 a share.
The oil refining and marketing company said its quarterly net earnings were down significantly because it chose to invest heavily during the period on major turnaround maintenance at two facilities — its newly acquired Galveston Bay refinery south of Houston, and its Garyville refinery in Louisiana.
Marathon said the turnarounds — a period when a refinery goes offline to revamp, renew, or replace critical equipment and processes — along with lost income associated with the shutdowns totaled $450 million for the quarter. The refiner spent $300 million on the turnarounds and lost $150 million in potential production.
Gary Heminger, Marathon Petroleum’s president and chief executive officer, said it marked “the largest quarterly combined turnaround expenditure” ever undertaken by the company but it was worth it. “This was our first significant turnaround at Galveston Bay, and we are pleased with the outcome,” he said, adding that in just another year the refinery should be operating at full capacity.
The turnaround allowed Marathon to expand the Garyville’s facility’s ability to refine crude oil to 110,000 barrels a day from a previous 90,000 a day, company officials said.
Mr. Heminger said Marathon’s profits also were hurt by the extreme winter in the Midwest, which made market conditions challenging. For example, the company purchased supplies of light, sweet crude oil to process at its refineries “and it was not being delivered” because of the winter weather. There were issues moving it by both water and train, Mr. Heminger said.
As a result, Marathon said its processing of crude oil was 100,000 barrels a day less than projected during the quarter. Mr. Heminger said market conditions are now improving and the company’s refineries are returning to their full run rates.
In its Speedway gas station segment, Marathon’s operating income was $58 million for the quarter, down from $67 million a year ago. Again, the weather was the primary factor affecting both gasoline sales and causing higher operating costs to keep stores open during the winter.
For the quarter, Marathon’s revenues totaled $23.3 billion, the same as a year ago when revenues also totaled $23.3 billion.
Marathon stock rose $2.49 a share, or 2.7 percent, to close at $95.44.
Also Thursday, MPLX LP, the Findlay-based Marathon subsidiary formed in 2012 to control the parent company’s 3,000-mile pipeline network and several storage facilities, reported its quarterly earnings.
MPLX had a profit of $34.2 million, or 41 cents per share, up 94 percent from $17.6 million, or 26 cents a share, that it had a year ago. Revenues also were $137.3 million, up 20 percent over the $117.7 million it had a year ago.
The company’s stock climbed $1.48 a share, or 2.75 percent, to close at $55.28.
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