The market expects HF Sinclair (DINO) to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on July 31, might help the stock move higher if these key numbers are better tha ...

Refining Operations - HollyFrontier aims to operate its refineries at a crude charge rate of 450,000 to 470,000 barrels per day[37] - HollyFrontier targets mid-cycle Refining EBITDA of $1.0 billion to $1.2 billion per year[132] - HollyFrontier is implementing cost-saving initiatives to achieve a target operating expense of $5.50 per throughput barrel[40] - HollyFrontier has increased its refining capacity by 15% since 2015[27] Holly Energy Partners (HEP) - HollyFrontier owns 59% of the LP Interest in HEP[15] - Over 80% of HEP's revenues are tied to long-term contracts and minimum volume commitments[15, 62] - HEP is targeting a distribution coverage ratio of 1.0 to 1.2x[62] Lubricants & Specialty Products - HollyFrontier Lubricants & Specialty Products (HF LSP) is the largest North American group III base oil producer[15] - HF LSP's Rack Forward business consistently generates EBITDA margins of 10-15%[114] - HF LSP targets Rack Forward EBITDA of $175 million to $200 million in 2018[135] Financials & Valuation - HollyFrontier's sum-of-the-parts valuation estimates a total share price of $60, based on a $37 valuation for Refining & Marketing, $12 for Holly Energy Partners, and $11 for Lubricants & Specialty Products[129] - HollyFrontier targets a net debt to EBITDA ratio of 1x (excluding HEP)[141]

Core Viewpoint - The article emphasizes the importance of value investing and highlights HF Sinclair (DINO) as a strong value stock based on its financial metrics and rankings [2][3][6] Company Analysis - HF Sinclair (DINO) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating it is among the best value stocks available [3] - The company's price-to-book (P/B) ratio is 0.9, which is significantly lower than the industry average of 1.81, suggesting that DINO is undervalued [4] - DINO's P/B ratio has fluctuated over the past year, reaching a high of 1.02 and a low of 0.53, with a median of 0.76 [4] - The price-to-sales (P/S) ratio for DINO is 0.3, compared to the industry's average P/S of 0.37, further indicating its undervaluation [5] - The combination of DINO's strong earnings outlook and favorable valuation metrics supports its classification as an impressive value stock [6]

HOLLYFRONTIER Acquisition of Sonneborn November 2018 Disclosure Statement Statements made during the course of this presentation that are not historical facts are "forward looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently uncertain and necessarily involve risks that may affect the business prospects and performance of HollyFrontier Corporation, and actual results may differ materially from those discussed during the ...

Core Viewpoint - HF Sinclair Corporation reported mixed first-quarter 2025 results, with an adjusted net loss of $50 million, or 27 cents per share, which was better than Wall Street's expectation of a 44-cent loss. Revenue declined 9.4% year-over-year to $6.37 billion, falling short of the consensus estimate of $6.67 billion [1]. Group 1: Financial Performance - The company experienced an adjusted net loss of $50 million, equating to 27 cents per share, which exceeded Wall Street's expectation of a 44-cent loss [1]. - First-quarter revenue decreased by 9.4% year-over-year, totaling $6.37 billion, which was below the consensus estimate of $6.67 billion [1]. Group 2: Management Commentary - CEO Tim Go highlighted strong performance in Marketing, Midstream, and Lubricants & Specialties businesses, along with sequential improvement in Refining, despite market challenges and tariff uncertainties. The company is optimistic about recent improvements in refining margins and is focused on executing strategic priorities across all business segments [2]. Group 3: Stock Performance and Analyst Ratings - Following the earnings announcement, HF Sinclair shares increased by 2%, trading at $31.89 [2]. - Piper Sandler analyst Ryan Todd maintained an Overweight rating on HF Sinclair but lowered the price target from $46 to $40. Wells Fargo analyst Roger Read maintained an Equal-Weight rating and reduced the price target from $44 to $34 [8].

Financial Performance - For the three months ended March 31, 2025, HF Sinclair Corporation reported sales and other revenues of $6,370 million, a decrease of 9.3% compared to $7,027 million in the same period of 2024[28]. - The net loss attributable to HF Sinclair stockholders for Q1 2025 was $4 million, compared to a net income of $315 million in Q1 2024, representing a significant decline[28]. - Revenues from external customers for the first quarter of 2025 totaled $6,370 million, a decrease from $7,027 million in the first quarter of 2024, representing a decline of approximately 9.3%[143]. - Net income for the three months ended March 31, 2025, was a loss of $2 million compared to a net income of $317 million for the same period in 2024[50]. - The company reported a net loss attributable to stockholders of $4 million, compared to a net income of $315 million for the same period last year[143]. - Operating income fell by 80% to $81 million in Q1 2025 compared to $411 million in Q1 2024[155]. - EBITDA decreased by 58% to $262 million in Q1 2025 from $617 million in Q1 2024[157]. - The company’s basic earnings per share for the three months ended March 31, 2025, was $(0.02), down from $1.57 in the same period of 2024[66]. Assets and Liabilities - Total current assets decreased to $4,987 million as of March 31, 2025, down from $5,014 million at the end of 2024[25]. - Total liabilities remained relatively stable at $7,289 million as of March 31, 2025, compared to $7,297 million at the end of 2024[25]. - HF Sinclair's total equity decreased to $9,253 million as of March 31, 2025, from $9,346 million at the end of 2024[25]. - The company’s accrued liabilities increased to $461 million as of March 31, 2025, compared to $377 million at the end of 2024[73]. - Total debt increased slightly to $2,676 million as of March 31, 2025, from $2,638 million at the end of 2024[156]. Cash Flow and Financing - Cash and cash equivalents at the end of Q1 2025 were $547 million, a decrease of 31.6% from $800 million at the beginning of the period[34]. - The company experienced a net cash used for operating activities of $89 million in Q1 2025, compared to a net cash provided of $317 million in Q1 2024[34]. - Net cash flows used for financing activities for the three months ended March 31, 2025, were $80 million, including $95 million paid in dividends and $350 million repaid under the HEP Credit Agreement[206]. - Liquidity as of March 31, 2025, was approximately $3.4 billion, consisting of $0.5 billion in cash and cash equivalents, an undrawn $1.65 billion credit facility, and $1.2 billion available under the HEP Credit Agreement[196]. Revenue Segments - Refined product revenues for the same period were $5,877 million, down 11.6% from $6,652 million in the prior year[50]. - Transportation fuels revenues decreased to $4,961 million from $5,555 million, reflecting a decline of 10.7%[50]. - The Refining segment includes operations from multiple refineries, with a focus on purchasing and refining crude oil and marketing refined products such as gasoline and diesel fuel[129]. - The Renewables segment encompasses operations from several renewable diesel units, contributing to the company's sustainability efforts[130]. - The Marketing segment includes branded fuel sales and licensing fees, with a significant presence in the West and Mid-Continent regions of the United States[131]. - The Lubricants & Specialties segment includes production operations in Ontario and specialty lubricant products marketed throughout North America[132]. - The Midstream segment operates logistics and refinery assets, including pipelines and terminals, primarily in the Mid-Continent, Southwest, and Rocky Mountains regions[133]. Operational Metrics - The company reported a consolidated refinery utilization rate of 89.4% in Q1 2025, slightly up from 89.2% in Q1 2024[161]. - Refinery throughput in the Mid-Continent region increased to 276,490 BPD in Q1 2025 from 273,890 BPD in Q1 2024, reflecting a utilization rate of 100.2%[160]. - In the West region, refinery throughput increased to 370,090 BPD in Q1 2025 from 369,410 BPD in Q1 2024, with an adjusted gross margin of $10.19 per barrel[161]. - Adjusted refinery gross margin per produced barrel sold in the Mid-Continent region decreased to $7.60 in Q1 2025 from $10.47 in Q1 2024[160]. - Adjusted refinery gross margin per produced barrel sold decreased by 28% from $12.70 in Q1 2024 to $9.12 in Q1 2025[176]. Environmental and Regulatory Matters - Environmental credit obligations increased to $71 million as of March 31, 2025, compared to $17 million at the end of 2024[73]. - The company has ongoing litigation regarding small refinery exemptions, with a favorable decision from the DC Circuit on July 26, 2024, vacating the EPA's denial of all small refinery exemption petitions[121]. - HFS Navajo reached a settlement agreement with the EPA, DOJ, and NMED, resulting in a new consent decree to resolve alleged violations of the Clean Air Act and New Mexico Air Quality Control Act[125]. - Under the 2025 Consent Decree, HFS Navajo is required to pay a total civil penalty of $34 million, with $10 million due to the United States and $10 million to the State of New Mexico within 30 days of the decree's effective date[126]. Shareholder Returns - The company declared dividends of $0.50 per common share, totaling $95 million for the current quarter, compared to $99 million in the same quarter of the previous year[50]. - A regular quarterly dividend of $0.50 per share was declared on May 1, 2025, payable on June 3, 2025[151]. - The company had remaining authorization to repurchase up to $799 million under the May 2024 Share Repurchase Program as of March 31, 2025[111]. - During the three months ended March 31, 2024, the company repurchased 2,930,742 shares for $166 million, while no shares were repurchased in the same period of 2025[111]. Risk Management - The company is exposed to commodity price risk and uses derivative contracts to mitigate price exposure related to crude oil and refined products[213]. - The company maintains various insurance coverages, including general liability and cyber insurance, but is not fully insured against certain risks due to insurability issues[219]. - A risk management oversight committee is in place to monitor the risk environment and mitigate identified risks that may affect goal achievement[221]. - Financial stability of counterparties is regularly reviewed, and no difficulties in honoring commitments under derivative contracts are expected[220].

Core Insights - HF Sinclair reported $6.37 billion in revenue for Q1 2025, a year-over-year decline of 9.4% and below the Zacks Consensus Estimate of $7.08 billion, resulting in a surprise of -10.06% [1] - The company posted an EPS of -$0.27, compared to $0.71 a year ago, with an EPS surprise of +34.15% against a consensus estimate of -$0.41 [1] Financial Performance Metrics - The average adjusted refinery gross margin per produced barrel was $9.12, exceeding the analyst estimate of $8.83 [4] - In the Mid-Continent Region, the average adjusted refinery gross margin was $7.6, above the estimate of $6.51 [4] - In the West Region, the average adjusted refinery gross margin was $10.19, slightly below the estimate of $10.37 [4] - Total sales of produced refined products were 621.79 million barrels per day, lower than the estimated 632.28 million barrels per day [4] - In the West Region, sales were 366.43 million barrels per day, below the estimate of 379.19 million barrels per day [4] - In the Mid-Continent Region, sales were 255.36 million barrels per day, slightly above the estimate of 253.09 million barrels per day [4] Revenue Breakdown - Lubricants & Specialties generated $638 million, surpassing the estimate of $562.35 million, but reflecting a year-over-year decline of 5.9% [4] - Midstream revenues were $156 million, below the estimate of $167.63 million [4] - Marketing revenues were $686 million, compared to the estimate of $745.45 million, showing an 11.6% year-over-year decline [4] - Refining revenues were $5.65 billion, exceeding the estimate of $4.26 billion, but down 8.9% year-over-year [4] - Renewables generated $190 million, above the estimate of $114.32 million, representing a year-over-year decline of 20.7% [4] - Corporate, Other and Eliminations reported -$951 million, better than the estimate of -$1.07 billion, with a year-over-year change of -7.3% [4] Stock Performance - HF Sinclair's shares have returned -10.5% over the past month, compared to a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1: Earnings Performance - HF Sinclair reported a quarterly loss of $0.27 per share, better than the Zacks Consensus Estimate of a loss of $0.41, compared to earnings of $0.71 per share a year ago, representing an earnings surprise of 34.15% [1] - The company posted revenues of $6.37 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 10.06%, and down from $7.03 billion year-over-year [2] - Over the last four quarters, HF Sinclair has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - HF Sinclair shares have declined approximately 14.2% since the beginning of the year, while the S&P 500 has decreased by 5.3% [3] - The company's earnings outlook is mixed, with a current Zacks Rank of 3 (Hold), indicating expected performance in line with the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $1.04 on revenues of $7.47 billion, and for the current fiscal year, it is $1.99 on revenues of $29.25 billion [7] Group 3: Industry Context - The Oil and Gas - Refining and Marketing industry is currently in the top 38% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - Another company in the same industry, RGC Resources Inc., is expected to report quarterly earnings of $0.68 per share, reflecting a year-over-year change of +7.9%, with revenues anticipated to be $34 million, up 4.1% from the previous year [9]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported a net loss attributable to shareholders of $4 million or negative $0.02 per diluted share, with an adjusted net loss of $50 million or negative $0.27 per diluted share compared to adjusted net income of $142 million or $0.71 per diluted share in Q1 2024 [11][12] - Adjusted EBITDA for Q1 2025 was $201 million, down from $399 million in Q1 2024 [12] - Net cash used for operations totaled $89 million, including $105 million of turnaround spending, with capital expenditures of $86 million for the quarter [15][16] Business Line Data and Key Metrics Changes - The Marketing segment achieved a record EBITDA of $27 million, up from $15 million in Q1 2024, driven by improved execution and portfolio high grading [14] - The Lubricants and Specialties segment reported EBITDA of $85 million, slightly down from $87 million in Q1 2024, reflecting a strong product mix [14] - The Midstream segment generated a record adjusted EBITDA of $119 million, up from $110 million in Q1 2024, primarily due to higher pipeline revenues [14] Market Data and Key Metrics Changes - Total sales volumes in the Renewables segment were 44 million gallons in Q1 2025, down from 61 million gallons in Q1 2024, impacted by lower sales volumes and the absence of producer's tax credit benefits [13] - The average oil charge was 606,000 barrels per day in Q1 2025, slightly up from 605,000 barrels per day in Q1 2024 [12] Company Strategy and Development Direction - The company remains focused on commercial and operational excellence, turnaround execution, and capital discipline, with strategic priorities to capture value across all business segments [6][10] - The company is optimistic about refining margins as it heads into the summer driving season and is focused on integrating and optimizing its portfolio of assets [10][73] Management Comments on Operating Environment and Future Outlook - Management noted that the first quarter results demonstrated the earnings power of the diversified portfolio despite challenging market conditions [73] - The company is encouraged by the recent strength in refining margins and anticipates improved cash flow in the latter part of the year [64][73] Other Important Information - The Board of Directors declared a regular quarterly dividend of $0.50 per share, payable on June 3, 2025 [9] - The company executed a successful refinancing transaction, issuing $1.4 billion in senior notes to extend its debt maturity profile and lower interest expenses [16] Q&A Session Summary Question: What is driving the growth in the midstream business? - Management indicated that increased focus on products and crude pipelines, along with revenue generation from tariff situations, are driving midstream performance [21][22] Question: What is the outlook for the lubricants business? - Management expressed confidence in the stability of the lubricants business, highlighting growth in high-value markets and a strong product mix [24][26] Question: Can you discuss demand across your markets in refining? - Management noted that demand is relatively flat, with distillate demand up due to colder weather and regulatory impacts [31][32] Question: What impacts did the regulatory changes have on the renewable diesel business? - Management stated that no tax credits were recognized in Q1 due to regulatory uncertainty, but they expect to manage feedstock optimization effectively [33][34] Question: What is the strategy regarding turnaround activities? - Management confirmed that Q1 had significant turnaround activities, with expectations for a lighter turnaround schedule in the following years [62][66] Question: How is the company managing tariff impacts on the lubricants business? - Management emphasized that the lubricants business is largely compliant with USMCA, mitigating tariff impacts [68][71]

Financial Data and Key Metrics Changes - For Q1 2025, HF Sinclair reported a net loss attributable to shareholders of $4 million or negative $0.02 per diluted share, with an adjusted net loss of $50 million or negative $0.27 per diluted share compared to adjusted net income of $142 million or $0.71 per diluted share for Q1 2024 [12][13] - Adjusted EBITDA for Q1 2025 was $201 million, down from $399 million in Q1 2024 [13] - Net cash used for operations totaled $89 million, including $105 million of turnaround spend, with capital expenditures of $86 million for the quarter [16] Business Line Data and Key Metrics Changes - The Marketing segment achieved a record EBITDA of $27 million, up from $15 million in Q1 2024, driven by improved execution and high grading the portfolio [10][15] - The Lubricants and Specialties segment reported EBITDA of $85 million, slightly down from $87 million in Q1 2024, with a focus on high-margin specialty products [10][15] - The Midstream segment generated a record adjusted EBITDA of $119 million, an increase from $110 million in Q1 2024, benefiting from higher pipeline revenues [10][15] - The Refining segment reported an adjusted EBITDA of negative $8 million, down from $29 million in Q1 2024, primarily due to lower gross margins and refined product sales volumes [13][15] Market Data and Key Metrics Changes - Total sales volumes in the Renewables segment were 44 million gallons for Q1 2025, down from 61 million gallons in Q1 2024, impacted by lower sales volumes and the absence of benefits from the producer's tax credit [14] - The average oil charge was 606,000 barrels per day for Q1 2025, slightly up from 605,000 barrels per day in Q1 2024 [14] Company Strategy and Development Direction - The company remains focused on commercial and operational excellence, turnaround execution, and capital discipline, with a strategic priority to capture value across all business segments [7][11] - HF Sinclair plans to spend approximately $775 million in sustaining capital for 2025, down $25 million from 2024, and expects to invest $100 million in growth capital across its business segments [19] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the recent strength of refining margins as the summer driving season approaches, indicating a focus on executing strategic priorities [11] - The company aims to maintain a breakeven to slightly positive position in the renewable diesel business despite regulatory uncertainties, with expectations for improved conditions in the future [36][42] Other Important Information - The Board of Directors declared a regular quarterly dividend of $0.50 per share, payable on June 3, 2025 [11] - As of March 31, 2025, HF Sinclair had a cash balance of $547 million and $2.7 billion of debt outstanding, with a debt-to-cap ratio of 23% [16][17] Q&A Session Summary Question: What is driving the growth in the midstream business and the outlook for continued growth? - Management highlighted increased focus on products and crude pipelines, indicating that the midstream business is not fully optimized yet and presents growth opportunities [22][23] Question: What is the confidence level of earnings in the lubricants business? - Management noted that the lubricants business is performing well, with a focus on high-growth end users and a strong product mix contributing to stability [25][26] Question: Can you discuss demand across markets and the impact on product sales? - Management indicated that demand is relatively flat, with distillate demand up due to colder weather and regulatory impacts, affecting sales patterns positively [32][33] Question: How did the regulatory changes impact the renewable diesel business? - Management stated that no tax credits were recognized in Q1 due to regulatory uncertainty, but they believe clarity will help improve the business moving forward [35][36] Question: What is the strategy regarding turnaround operations and cash management? - Management confirmed that Q1 was a heavier turnaround quarter, with expectations for better cash flow in the future, allowing for potential shareholder returns [64][67] Question: How are tariffs affecting the lubricants business? - Management emphasized efforts to tariff-proof the lubricants business, ensuring compliance with USMCA and closely monitoring costs [71][74]