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July 30 (Reuters) - Marathon Petroleum Corp reported a weaker-than-expected quarterly profit, hurt by a decline in refining margins as the company’s crude costs remained high.
Marathon Petroleum, unlike other refiners, failed to benefit from a 50 percent drop in global crude prices in the past year.
Shares of the company, which was spun off from Marathon Oil Corp, fell about 5 percent in premarket trading on Thursday.
The company’s gross refining margin fell to $14.84 per barrel in the second quarter from $16.02 a year earlier.
In contrast, Valero Energy Corp reported a better-than-expected quarterly profit on Thursday as its refining margin rose to $13.71 per barrel from $9.84.
Marathon Petroleum said it was hurt by “less favorable product price realizations compared to the spot market reference prices and less favorable crude oil acquisition costs.”
The company also announced another $2 billion share buyback program. Marathon Petroleum said it had bought back $408 million of shares in the second quarter under the $2 billion buyback plan it had announced in July last year.
The company said this month it would acquire MarkWest Energy Partners LP for $15.6 billion to enter the natural gas processing business.
Net income attributable to Marathon Petroleum fell to $826 million, or $1.51 per share, in the quarter ended June 30 from $855 million, or $1.48 per share, a year earlier.
Analysts on average had expected a profit of $1.76 per share, according to Thomson Reuters I/B/E/S.
Marathon Petroleum’s total revenue and other income fell 23.6 percent to $20.58 billion.
The company’s shares were trading at $53.20 before the bell. Up to Wednesday’s close, the stock had risen nearly 24 percent this year. (Reporting by Manya Venkatesh in Bengaluru; Editing by Don Sebastian and Kirti Pandey)