By November 3, 2016 Read More →

HollyFrontier Q3 profit beats as cost cutting offsets weak margins

HollyFrontier Q3

HollyFrontier Q3 profits topped analysts’ expectations.  Company photo.

HollyFrontier Q3: Refiner processed 456,740 b/d in Q3

Nov 3 (Reuters) – HollyFrontier Corp reported a better-than-expected quarterly profit on Thursday as a dip in costs helped soften the impact of a steep decline in refining margins.

Crack spreads – the difference between the prices of crude oil and refined products – have shrank sharply this year due to a spike in U.S. inventories of refined products.

HollyFrontier’s refining margin more than halved to $9.83 per barrel in the third quarter ended Sept. 30.

Bigger refiners such as Phillips 66, Valero Energy Corp and Marathon Petroleum Corp have also reported a slide in margins in their latest quarters.

Dallas-based HollyFrontier agreed on Monday to buy Suncor Energy Inc’s Petro-Canada lubricants unit, as it attempts to reduce its reliance on the refining business.

HollyFrontier refined 456,740 barrels per day (b/d) in the quarter, compared with 474,190 b/d a year earlier.

Total operating costs and expenses fell nearly 17 per cent to $2.72 billion.

The net income attributable to the company’s shareholders fell to $74.5 million, or 42 cents per share, from $196.3 million, or $1.04 per share, a year earlier.

The company’s adjusted profit was 38 cents per share, higher than the average analyst estimate of 36 cents.

Sales and other revenue fell 20.6 per cent to $2.85 billion, but topped analysts’ expectations of $2.57 billion.

(Reporting by Ismail Shakil in Bengaluru; Editing by Maju Samuel)

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