PBF Energy beats profit estimates on margin, demand boost; shares surge

U.S. refiner PBF Energy Inc (PBF.N) posted a bumper third-quarter profit on Thursday that cruised past Wall Street estimates, boosted by strong demand for fuel and refined products and robust refining margins, sending its shares 8% higher.

Refining fundamentals have been favorable due to domestic demand recovery and strong exports over Russia’s invasion of Ukraine, while tight crude oil supplies are boosting margins for refiners.

“As we head into the winter months, global product inventories remain low, consumer demand is resilient and refineries are running at high utilization to keep pace,” Chief Executive Tom Nimbley said.

Against the backdrop of bullish outlook, the Parsippany, New Jersey-based refiner also reinstated its regular quarterly dividend of 20 cents per share.

“The underlying supply and demand fundamentals of the global hydrocarbon market created an environment that has allowed PBF to finish the third quarter with effectively zero net debt,” Nimbley added.

PBF’s gross refining margin, excluding special items, tripled to $2.26 billion in the reported quarter.

Larger rival Valero Energy (VLO.N), which also beat profit estimates on robust margins earlier this week, added it continues to maximize refining utilization.

U.S. refineries this year have operated at record levels spurred by criticism from President Joe Biden, who said refiners were putting profits ahead of consumers and urged them to expand capacity.

PBF said total crude oil and feedstocks throughput rose 16% to 90.6 million barrels in the July-September quarter from last year, adding that the level of throughput was the highest in the company’s history.

The company expects full-year throughput between 900,000 barrels per day (bpd) and 960,000 bpd and in the current quarter between 945,000 bpd and 1 million bpd.

Net income attributable to stockholders stood at $1.06 billion, or $8.40 per share, in the three months ended Sept. 30, compared with $59.1 million, or 49 cents per share, last year.

Excluding items, PBF posted a profit of $7.96 per share, beating analysts’ average estimate of $6.49 share, according to Refinitiv IBES.