Earnings Review: HollyFrontier Corporation (NYSE: HFC)

On Wednesday, Shares of HollyFrontier Corporation (NYSE: HFC) showed the bullish trend with a higher momentum of 0.64% and ended its trading session at $68.80. The company traded total volume of 2.2M shares as contrast to its average volume of 3.65M shares. The company has a market value of $12.15B and about 176.62M shares outstanding. During the 52-week trading session, the minimum price at which share price traded was registered at $25.97 and reached the max level of $83.28.

HollyFrontier Corporation (HFC) recently stated first quarter net income attributable to HollyFrontier stockholders of $268.10M or $1.50 per diluted share for the quarter ended March 31, 2018, contrast to a net loss of $45.50M or $(0.26) per diluted share for the quarter ended March 31, 2017.

The first quarter results reflect special items that collectively increased net income by a total of $130.80M. These items include a lower of cost or market inventory valuation adjustment that increased pre-tax earnings by $103.80M, a $71.70M reduction to RINs costs as a result of our Cheyenne refinery’s small refinery exemptions for the 2015 and 2017 calendar years and a charge of $3.60M for integration costs related to our 2017 Petro-Canada Lubricants Inc. (“PCLI”) acquisition.

Excluding these items, net income for the current quarter was $137.30M ($0.77 per diluted share) contrast to a net loss of $33.40M ($(0.19) per diluted share) for the first quarter of 2017, which excludes an inventory valuation adjustment, PCLI acquisition and integration costs, incremental cost of products sold attributable to our PCLI inventory value step-up, a gain on foreign currency swap contracts that fixed the USD/CAD conversion rate on our PCLI purchase price and a loss on early extinguishment of debt. Collectively, these items reduced prior year earnings by $12.00M. Adjusted for these items, net income increased $170.70M contrast to the same period of 2017 because of higher sales volumes and margins in our refining business as well as a full quarter contribution from our PCLI acquisition. Total operating expenses for the quarter were $320.30M contrast to $307.70M for the first quarter of last year.

Our Lubes and Specialty Products segment stated EBITDA of $41.70M, driven by strong Rack Forward sales volumes and margins. Rack Forward EBITDA was $56.00M for the quarter and HollyFrontier continues to expect Rack Forward EBITDA in the $180.00M to $200.00M range for 2018.

Holly Energy Partners, L.P. (“HEP”) stated EBITDA of $88.50M for the first quarter contrast to $70.10M in the first quarter of 2017. This growth was driven by the acquisition of the SLC and Frontier Pipelines as well as volume growth in HEP’s Permian crude gathering system. Distributable cash flow came in at $69.10M, delivering a distribution coverage ratio of 1.04x.

For the first quarter of 2018, net cash offered by operations totaled $333.80M, a boost of $373.20M contrast to the first quarter of 2017. During the period, we declared and paid a dividend of $0.33 per share to shareholders totaling $58.90M and spent $25.20M in stock repurchases. At March 31, 2018, our cash and cash equivalents totaled $781.50M, a $150.70M increase over cash and cash equivalents of $630.80M at December 31, 2017. In Addition To, our consolidated debt was $2,382.90M. Our debt, exclusive of HEP debt, which is nonrecourse to HollyFrontier, was $991.90M at March 31, 2018.

The Company offered gross profit margin of 21.90%. Beta factor was 1.09. The stock, as of recent close, has shown the weekly upbeat performance of 1.84% which was maintained at 34.32% in this year.

Grover Beam

Grover Beam has over 14 years experience in the financial services industry giving him a vast understanding of how news affects the financial markets. He is an active day trader spending the majority of her time analyzing earnings reports and watching commodities and derivatives. He has a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.