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Earnings

Marathon Petroleum misses profit estimates as costs surge

(Reuters) - U.S. oil refiner Marathon Petroleum Corp MPC.N missed Wall Street forecasts for quarterly profit by a wide margin on Monday, as its expenses surged during a period of increased refining activity.

The results came hours after Marathon announced a $23 billion deal to buy rival Andeavor ANDV.N, an acquisition that will see the company leapfrog Valero Energy VLO.N as the largest U.S. refiner by capacity.

Findlay, Ohio-based Marathon has seen expenses surge, as it ramps up refining activity to meet rising demand following record levels of U.S. crude oil production.

Marathon, which said it would save $1 billion in costs each year after closing the Andeavor deal, reported expenses of $18.54 billion in the three months ended March 31, up 15 percent from a year earlier.

The company’s shares fell 5.2 percent to $77.19 in premarket trading on Monday.

Net income attributable to Marathon rose about 23 percent to $37 million in the first quarter.

Excluding one-time items, Marathon earned 4 cents per share, falling short of analysts’ average estimate of 15 cents, according to Thomson Reuters I/B/E/S.

The company, which also operates convenience store chain Speedway, said revenue jumped 16 percent to $18.98 billion, led by higher refining and marketing margins.

Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sai Sachin Ravikumar

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