HF Sinclair shares drop on revenue miss despite earnings beat

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HF Sinclair shares drop on revenue miss despite earnings beat
Credit: © Reuters.

DALLAS - HF Sinclair Corporation (NYSE:DINO) reported a mixed financial outcome for the fourth quarter, surpassing analyst expectations for adjusted earnings per share (EPS) but falling short on revenue. The company announced a fourth-quarter adjusted EPS of $0.87, outperforming the analyst consensus of $0.72. However, revenue for the quarter was reported at $7.66 billion, missing the consensus estimate of $8.05 billion.

The company's performance was a significant downturn compared to the same quarter last year, which saw net income attributable to HF Sinclair stockholders of $587.0 million, or $2.92 per diluted share. The reported net loss for the current quarter stood at $(62.2) million, or $(0.34) per diluted share, highlighting the stark contrast year-over-year (YoY).

HF Sinclair's CEO, Tim Go, attributed the strong adjusted net income results to the company's execution of its corporate strategy, including scheduled maintenance turnarounds and the integration of its HEP business. Despite the revenue shortfall, Go emphasized the company's focus on maximizing shareholder value and confidence in the diversified asset base and disciplined capital allocation.

The market reacted negatively to the revenue miss, with HF Sinclair's stock price declining by 4%. This downward movement suggests investor concern over the company's ability to meet top-line expectations.

In the refining sector, HF Sinclair experienced a loss before interest and income taxes of $(74.6) million for the quarter, a significant drop from the income of $758.8 million in the fourth quarter of the previous year. The consolidated refinery gross margin decreased to $13.88 per produced barrel, a 41% decline YoY. The renewables segment also reported a loss before interest and income taxes of $(75.9) million, widening from the $(34.7) million loss in the same period last year.

The company's marketing segment saw a decrease in income before interest and income taxes to $2.5 million, down from $16.9 million YoY. The lubricants and specialties segment reported an income of $34.6 million, a decrease from $44.6 million YoY.

Looking ahead, HF Sinclair announced a $0.05 increase in its regular quarterly dividend to $0.50 per share, signaling a commitment to returning value to shareholders. The company's cash and cash equivalents totaled $1,353.7 million at the end of the quarter, marking a decrease from $2,214.8 million at the end of the previous quarter.

HF Sinclair's financial results indicate a challenging quarter in terms of revenue, yet the company managed to deliver a solid adjusted EPS, reflecting its operational resilience and strategic initiatives.

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