Refining Margin Squeeze Hits HF Sinclair's Q2 Bottom Line: Details
Portfolio Pulse from Lekha Gupta
HF Sinclair Corporation (NYSE:DINO) reported its Q2 FY24 results, showing flat revenues but a significant drop in adjusted EBITDA due to reduced refinery gross margins. Despite this, the company beat EPS expectations and declared a dividend. Shares are trading lower following the report.
August 01, 2024 | 4:43 pm
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NEGATIVE IMPACT
VanEck Oil Refiners ETF (CRAK) may be impacted by HF Sinclair's Q2 results, as the ETF provides exposure to oil refiners including HF Sinclair.
As an ETF that includes HF Sinclair, CRAK may experience some negative impact due to the significant drop in HF Sinclair's adjusted EBITDA, despite the overall flat revenue and EPS beat.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
HF Sinclair reported flat revenues but a significant drop in adjusted EBITDA for Q2 FY24, primarily due to reduced refinery gross margins. Despite beating EPS expectations and declaring a dividend, shares are trading lower.
The significant drop in adjusted EBITDA, particularly in the Refining segment, outweighs the positive aspects of beating EPS expectations and declaring a dividend. This has led to a negative market reaction, with shares trading lower.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
First Trust Energy AlphaDEX Fund (FXN) may be affected by HF Sinclair's Q2 results, given its exposure to energy stocks including HF Sinclair.
Given FXN's exposure to energy stocks including HF Sinclair, the significant drop in HF Sinclair's adjusted EBITDA could negatively impact the ETF, despite the flat revenue and EPS beat.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50