Delek (DK) Stock Declines 6.1% Despite Beating On Q3 Earnings


Shares of Delek US Holdings, Inc.’s DK have dropped 6.1% because the third-quarter 2021 earnings announcement on Nov 4.

This downward inventory motion might presumably be triggered by an enormous debt burden within the third quarter, improve in working bills and an absence of contribution from DK’s retail phase.  

Behind the Earnings Headlines

Delek’s third-quarter 2021 outcomes just lately reported adjusted earnings of 13 cents a share. The Zacks Consensus Estimate was of a lack of 34 cents. The underside line reversed the year-ago quarter’s lack of $1.01, attributable to a stronger-than-expected contribution from its refining phase. Margin from the Refining unit was $91.4 million, outpacing the Zacks Consensus Estimate of $66 million.

Quarterly revenues of $2.96 billion in contrast favorably with the year-ago gross sales of $2.06 billion and surpassed the Zacks Consensus Estimate of $2.55 billion.

Segmental Performances

Refining:  DK reported a optimistic margin of $91.4 million for this phase towards the unfavourable $17.8 million within the year-ago quarter. Furthermore, adjusted margins of $91.8 million rebounded from -$21.2 million within the year-ago interval. Outcomes improved from elevated crack spreads because the rising frequency of vaccination and a worldwide financial restoration buoyed demand.

Logistics:  This unit represents Delek’s majority curiosity in Delek Logistics Companions, L.P. (DKL), a publicly-traded grasp restricted partnership that owns, operates, develops and acquires pipelines and different midstream belongings. The Logistics unit’s margin of $67.2 million was in keeping with the year-ago interval’s determine, led by larger refinery utilization and demand that was partially offset by working expenditures related to pipeline integrity work.

Retail: Margin for the unit, which was shaped from the acquisition of Alon USA Vitality in 2017, fell 2.2% to $17.9 million from the year-earlier quarter’s stage of $18.3 million on decrease Retail gasoline gross sales. Delek’s merchandise gross sales of $81.7 million with a margin of 33.7%, on common, in contrast unfavorably with $86.8 million gross sales, carrying a margin of 31.6%, on common, within the prior 12 months. Its retail gasoline gallons sale totaled $41.9 million within the September quarter of 2021, the typical margin being 33 cents per gallon. This in contrast unfavorably with $45.1 million sale, the typical margin being 31 cents per gallon in third-quarter 2020.

Financials

Whole working bills incurred within the quarter elevated 36.1% from the prior-year interval’s stage to $2,910.7 million.

Within the reported quarter, Delek spent $28.9 million on capital applications (50.2% on the Refining phase). As of Sep 30, 2021, DK had money and money equivalents price $830.6 million and long-term debt of $2,158.8 million, with the whole debt to whole capital of 68.8%.

Steering

Delek initiatives fourth-quarter 2021 whole working bills within the 150-$160 million band whereas whole crude throughput is estimated within the 280,000-290,000 barrels per day vary.

DK anticipates its 2021 capital bills at round $205-$210 million, on a gross foundation.

Zacks Rank & Key Picks

Delek at present has a Zacks Rank #3 (Maintain). Some better-ranked gamers within the energy  house are EOG Assets EOG, Diamondback Vitality FANG and ConocoPhillips COP, every presently flaunting a Zacks Rank #1 (Robust Purchase). You may see the complete list of today’s Zacks #1 Rank stocks here.

EOG Assets reported third-quarter 2021 adjusted earnings per share of $2.16, beating the Zacks Consensus Estimate of $2.01. Robust earnings have been pushed by elevated manufacturing volumes and the next realization of commodity costs.

EOG introduced a quarterly dividend of 75 cents per share, indicating an 82% improve from the earlier stage. The dividend might be paid out on Jan 28, 2022, to its shareholders of file as of Jan 14, 2022. EOG Assets additionally declared a particular dividend of $2 per share. Furthermore, the board of administrators up to date its share repurchase authorization to $5 billion.

Diamondback Vitality reported third-quarter 2021 adjusted earnings of $2.94 per share, which surpassed the Zacks Consensus Estimate of $2.81 and the year-ago quarter’s earnings of 62 cents. FANG’s backside line was aided by better-than-expected manufacturing.

The board of administrators declared a dividend of fifty cents per share for the third quarter, accounting for an 11.1% hike in Diamondback Vitality’s quarterly payout from the earlier stage of 45 cents. The quantity might be paid out on Nov 18, 2021, to its shareholders of file as of Nov 11. FANG additionally generated a free money stream of $740 million within the third quarter.

ConocoPhillips reported third-quarter 2021 adjusted earnings per share of $1.77, comfortably beating the Zacks Consensus Estimate of $1.53. This outperformance is led by elevated manufacturing volumes owing to the Concho acquisition and the rising realized commodity costs.

Primarily based in Houston, TX, this one of many world’s largest unbiased oil and gasoline producers’ capital expenditures and investments totaled $1.3 billion, and dividend funds grossed $579 million. ConocoPhillips’ internet money supplied by working actions was recorded at $4.8 billion, up from the year-ago determine of $868 million. COP generated a free money stream of $2.8 billion within the third quarter.

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