Marathon Petroleum's third-quarter net income jumped more than fivefold as a spike in fuel prices bolstered profit margins and the refiner confirmed a deal to sell Midwestern facilities to a Carl Icahn-controlled rival.
The Findlay, Ohio, refiner and pipeline provider posted earnings of $7.45 billion, or $26.59 a share, up from $1.37 billion, or $4.51 a share, a year earlier.
Adjusted earnings rose to $26.93 a share, far surpassing the average analyst target of $25.37 a share, as per FactSet.
Revenue surged 58% to $56.49 billion, handily beating forecasts of $46.61 billion.
At the Refining & Marketing unit, margin rose to $45.70 a barrel, up from $17.60 a barrel a year earlier due to wider crack spreads across all operations.
A crack spread is the pricing difference between a barrel of crude oil and the final refined petroleum product, such as gasoline, diesel and jet fuel.
Marathon said CVR Energy, the oil refiner controlled by investor Carl Icahn, agreed to buy two Midwestern refineries and related infrastructure for about $4.2 billion, in a deal originally reported by The Wall Street Journal.
Marathon said it would receive about $3.45 billion for the refineries, one in Mandan, North Dakota and one in St. Paul Park, Minnesota, while its pipeline affiliate MPLX would receive $750 million for related midstream assets. MPLX plans to redeploy the proceeds in growth areas such as the Permian and Marcellus oil and natural-gas fields.
In the military conflict that broke out between the U.S., Israel and Iran at the end of February, the blockade of the vital Strait of Hormuz throughway choked off roughly 20% of the world's daily oil transit. The severe supply disruption drove global refining margins higher, allowing domestic refiners like Marathon to capture large profit margins by processing more insulated North American crude supplies.
For the fourth quarter, the company forecast refinery throughput of 2.8 million barrels of oil per day.
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