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Delek US Holdings, Inc. DK reported third-quarter 2023 adjusted net income of $2.02 per share, which beat the Zacks Consensus Estimate of $1.36. The bottom line also improved from the year-ago quarter’s level of 2 cents. The outperformance could be attributed to record contributions from the Logistics and Retail segments and decreased year-over-year expenses during the quarter.
Net revenues decreased 11.3% year over year to $4.2 billion. The figure, however, beat the consensus mark of $4 billion. Adjusted EBITDA came in at $345.1 million compared with $414 million in the year-ago period.
On Nov 1, 2023, DK’s board of directors approved a 2.1% increase in regular dividends, bringing the quarterly payout to 24 cents per share. The dividend will be paid out on Nov 20, 2023, to shareholders of record as of Nov 13, 2023.
Delek US Holdings, Inc. Price, Consensus and EPS Surprise
Delek US Holdings, Inc. price-consensus-eps-surprise-chart | Delek US Holdings, Inc. Quote
Segmental Performances
Refining: Adjusted EBITDA for the segment amounted to $285.5 million, indicating a decline from the prior-year quarter’s level of $355.7 million. This significant year-over-year decline can be attributed to lower refining crack spreads, with DK’s benchmark crack spreads decreasing approximately 8.2% during the period. However, the reported figure exceeded our prediction of $177.9 million.
Logistics: During the third quarter, the segment registered an adjusted EBITDA of $96.5 million compared with $91.5 million in the year-ago quarter. The figure beat our projection of $91.7 million. This substantial growth can be attributed to the exceptional performance of the Midland Gathering and the Delaware Gathering systems, as well as annual rate increases.
Retail: The segment registered an adjusted EBITDA of $16.2 million during the reported quarter compared with $13.5 million in the year-ago period. The figure beat our projection of $10.1 million.
Higher fuel volume, higher average fuel margins and higher in-store sales were the main reasons behind the increase.
Merchandise sales of $83.5 million declined from the year-ago quarter’s reported figure of $84.2 million. The figure missed our estimate by 3.9%. The merchandise margin of 5.5% increased from 32.6% recorded in the year-ago period.
DK’s retail stations sold 43,170 thousand gallons of gasoline compared with 44,729 in the corresponding period of 2022.
Financials
Total operating expenses in the third quarter decreased about 14.2% year over year to $4.5 billion. Delek US spent $301.6 million on capital programs (about 65% on the Refining segment) in the same time frame.