By Nicole Jao NEW YORK (Reuters) -HF Sinclair beat Wall Street estimates for third-quarter profit on Thursday, helped by improved refining margins and strength in its midstream segment. The Dallas, Texas-based independent refiner said it is well positioned to address the growing supply and demand imbalances on the U.S. West Coast and announced a new project […]
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HF Sinclair beats profit estimates, eyes US West Coast opportunities
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By Nicole Jao
NEW YORK (Reuters) -HF Sinclair beat Wall Street estimates for third-quarter profit on Thursday, helped by improved refining margins and strength in its midstream segment.
The Dallas, Texas-based independent refiner said it is well positioned to address the growing supply and demand imbalances on the U.S. West Coast and announced a new project to supply more jet fuel to the region.
U.S. fuelmakers have benefited from a rebound in refining margins from multi-year lows in 2024, as supply shortages related to geopolitical tensions in Ukraine supported stronger pricing. Valero Energy and Phillips 66 also outperformed Wall Street expectations.
U.S. refinery margins in the third quarter rose nearly 29% on average from a year earlier, helped by strong diesel and gasoline margins on the back of robust demand and low inventories.
HF Sinclair’s refining segment posted a quarterly profit of $661 million, compared with $110 million a year earlier.
The increase was primarily driven by higher margins in the West Coast and Midcontinent regions, the company said during a call with investors on Thursday.
HF Sinclair’s adjusted refinery gross margin per barrel rose to $17.50 in the quarter, compared with $9.38 from a year earlier and refinery utilization was 107.8%, compared with 101.2% a year ago.
The midstream segment reported $114 million of quarterly profit, up 2.7% from last year.
Midstream firms that transport natural gas have benefited from an increase in electricity consumption by homes, businesses, crypto-mining and an AI-led boom in data centers.
The company reported a profit of $2.44 per share for the third quarter, compared with analysts’ average estimate of $1.77 per share, according to data compiled by LSEG.
Shares of HF Sinclair were last down 1%.
GOING WEST
The company announced a new project at its Puget Sound Refinery in the fourth quarter that will increase its flexibility to produce more jet fuel to supply West Coast markets.
Increasing West Coast fuel supply would help ease strain on the region as two refineries accounting for approximately 20% of California’s refining capacity close down. Phillips 66 is winding down its Los Angeles refinery by the end of this year and Valero Energy plans to shut the Benicia refinery next year.
The Puget Sound project, expected to be completed and in service following a turnaround at the refinery, follows another recently completed project to increase production capability of a special blend of gasoline for the California market.
HF Sinclair said on Wednesday it is evaluating multiple projects to expand its pipeline systems across the Rocky Mountain and West Coast and bolster fuel supplies in markets such as California and Nevada.
(Reporting by Nicole Jao in New York and Pooja Menon in Bengaluru; Editing by Leroy Leo and Nia Williams)