Delek US Holdings, Inc. DK reported a third-quarter 2024 adjusted internet lack of $1.45 per share, narrower than the Zacks Consensus Estimate of a lack of $1.71, owing to decrease year-over-year working prices. The determine additionally deteriorated from the year-ago quarter’s revenue of $2.02 per share. The loss was as a result of Refining section’s weak year-on-year contributions.
Internet revenues decreased 35.9% 12 months over 12 months to $3 billion. The determine additionally missed the Zacks Consensus Estimate by $48 million.
Delek US Holdings, Inc. Value, Consensus and EPS Shock
Delek US Holdings, Inc. price-consensus-eps-surprise-chart | Delek US Holdings, Inc. Quote
The diversified downstream power firm’s adjusted EBITDA was $70.6 million in contrast with $345.1 million within the year-ago interval.
DK’s board of administrators authorized the common quarterly dividend of 25.5 cents per share. The dividend shall be paid on Nov. 18, 2024, to its shareholders of file as of Nov 12.
Keep up-to-date with all quarterly releases: See Zacks Earnings Calendar.
On this quarter, the corporate launched the Enterprise Optimization Plan, designed to extend general profitability by a minimum of $100 million.
DK’s Segmental Performances
Refining: The section’s adjusted EBITDA was $10.2 million, indicating a decline from the prior-year quarter’s revenue of $296.1 million. This important’s year-over-year decline was attributable to decrease refining crack spreads. Within the third quarter of 2024, DK’s benchmark crack spreads fell by a mean of 49.1% from prior-year ranges. Moreover, the reported determine missed our estimate of $76.9 million.
Logistics: This unit represents Delek’s majority curiosity in Delek Logistics Companions, L.P.—a publicly traded grasp restricted partnership that owns, operates, develops and acquires pipelines and different midstream property.
Within the third quarter, the section registered an adjusted EBITDA of $106.1 million in contrast with $96.5 million within the year-ago quarter. The determine additionally beat our estimate of $100.1 million. This year-over-year progress is pushed by sturdy contributions from the Delaware Gathering methods, annual charge will increase and the influence of the Wink to Webster (W2W) pipeline dropdown.
DK’s Financials
Whole working bills within the third quarter decreased about 29.6% 12 months over 12 months to $3.1 billion. Delek spent $128.5 million on capital packages in the identical timeframe.
As of Sept. 30, 2024, the corporate had money and money equivalents value $1 billion and long-term debt of $2.8 billion, with debt to whole capital ratio of about 76.1%.
DK’s Key Transactions: Acquisition, Divestiture and Funding
H2O Midstream Acquisition: On Sept. 11, 2024, Delek Logistics accomplished the 100% acquisition of the membership pursuits in H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC and H2O Midstream LLC (collectively, the “H2O Midstream Entities”) from H2O Midstream Holdings, LLC.
This transaction, valued at $229.5 million, consists of water disposal and recycling operations within the Midland Basin of Texas and is topic to closing working capital changes. The deal additionally incorporates $70 million in most well-liked models. In reference to the acquisition, Delek Logistics incurred $6.1 million in transaction-related prices ($4.7 million after-tax) for the three months ended Sept. 30, 2024.
Retail Divestiture: On Sept. 30, 2024, Delek US finalized the sale of its retail operations, transferring 100% of the fairness pursuits in 4 wholly owned subsidiaries that function 249 retail gas and comfort shops beneath the Delek US Retail model. The customer is a subsidiary of Fomento Económico Mexicano, S.A.B. de C.V.
The sale generated roughly $390.2 million in internet money proceeds earlier than taxes. Delek US acknowledged a pre-tax acquire of $98.4 million from the transaction. In accordance with ASC 205-20 and ASC 360, the outcomes of the retail operations have been labeled as discontinued operations, with the related property and liabilities additionally reclassified accordingly.
Wink to Webster Pipeline: On Aug. 1, 2024, the corporate elevated its oblique funding in Wink to Webster Pipeline LLC by 0.6%, buying the extra stake for $18.6 million. This raised the whole oblique possession within the pipeline three way partnership to fifteen.6%.
Subsequently, on Aug. 5, 2024, the corporate contributed its complete 50% curiosity in W2W Holdings LLC (“HoldCo”), which incorporates the 15.6% oblique stake in Wink to Webster Pipeline LLC and the associated three way partnership debt, to a subsidiary of Delek Logistics. The full consideration for this transaction amounted to $83.9 million, together with post-close changes, in addition to the forgiveness of a $60 million payable to Delek Logistics and the issuance of two,300,000 Delek Logistics widespread models.
The transaction was described as an asset acquisition between entities beneath widespread management, and due to this fact, no acquire or loss was acknowledged. As of Aug. 5, 2024, the working outcomes of HoldCo are actually reported throughout the firm’s Logistics section, a change from its earlier classification beneath company, different and eliminations.
DK’s This autumn and 2024 Steerage
For 2024, the built-in downstream power firm expects capital expenditures of $330 million because it plans to spend $220 million on Refining, $70 million on Logistics (Delek Logistics Companions), $15 million on Discontinued Operations (Retail) and $25 million on Company & Different.
For the fourth quarter, the corporate anticipates working prices within the band of $177-$188 million, normal and administrative bills within the vary of $53-$58 million and depreciation and amortization prices between $95 million and $105 million. It additionally expects internet curiosity bills within the $75-$80 million vary.
The corporate anticipates a complete crude throughput of 255,000-269,000 barrels per day and a complete throughput of 265,000-276,000 barrels per day in the identical timeframe.
DK expects to course of 67,000-69,000 barrels of crude oil per day (bpd) at its Tyler, TX, refinery within the fourth quarter. The El Dorado, AR, refinery is anticipated to course of 77,000-80,000 bpd. The Massive Spring, TX, refinery is anticipated to course of 71,000 bpd to 74,000 bpd and the Krotz Springs, LA, refinery is anticipated to course of 50,000 bpd to 53,000 barrels per day (bpd).
DK at present carries a Zacks Rank #4 (Promote). You may see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Necessary Vitality Earnings So Far
Proper in the midst of earnings season, there have been a couple of key energy releases thus far. Allow us to look by way of a few them.
Liberty Vitality LBRT, the Denver-CO-based oil and gasoline gear firm, introduced an adjusted internet revenue of 45 cents per share, which missed the Zacks Consensus Estimate of 55 cents. This was primarily attributable to poor gear and providers execution and decrease exercise within the reported quarter. Moreover, the underside line declined from the year-ago quarter’s reported determine of 86 cents attributable to a year-over-year improve in prices and bills.
Forward of the earnings launch, LBRT’s board of administrators introduced a dividend of 8 cents per widespread share payable on Dec. 20, to its stockholders of file as of Dec. 6. This dividend represents a 14% improve from the prior common quarterly dividend of seven cents per share. Within the quarter, Liberty returned $51 million to its shareholders by way of a mix of share repurchases and money dividends.
Vitality infrastructure supplier, Kinder Morgan, Inc. KMI reported third-quarter adjusted earnings per share of 25 cents, which missed the Zacks Consensus Estimate of 27 cents. The underside line was flat 12 months over 12 months. The weak spot in quarterly outcomes was brought on by decrease contributions from the Merchandise Pipelines and CO2 enterprise segments.
KMI additionally introduced a quarterly money dividend of 28.75 cents per share for the third quarter of 2024 (annualized dividend of $1.15), implying a 2% improve from the third-quarter 2023 degree. The dividend is payable on Nov. 15, 2024, to its shareholders of file as of Oct. 31.
Schlumberger Restricted SLB, a Houston, TX-based oil and gasoline gear and providers supplier introduced third-quarter earnings of 89 cents per share (excluding expenses and credit), which beat the Zacks Consensus Estimate of 88 cents. The underside line additionally elevated from the year-ago quarter’s 78 cents. The robust quarterly earnings have been primarily pushed by broad-based earnings progress and margin enlargement, particularly within the Center East, Asia and offshore North America. Moreover, price optimization, better adoption of digital options and contributions from long-cycle deepwater and gasoline initiatives performed important roles.
SLB reported a free money stream of $1.81 billion within the third quarter. As of Sept. 30, the corporate had roughly $4.46 billion in money and short-term investments. On the finish of the quarter, it registered a long-term debt of $11.86 billion.
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Schlumberger Limited (SLB) : Free Stock Analysis Report
Delek US Holdings, Inc. (DK) : Free Stock Analysis Report
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Liberty Energy Inc. (LBRT) : Free Stock Analysis Report
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