Dallas-based HF Sinclair Corporation delivered an unexpected financial win in the first quarter, reporting adjusted earnings that caught analysts off guard on Friday.
The energy company earned 69 cents per share for the three months ending March 31, a dramatic turnaround from analyst predictions of a 6-cent loss per share, according to LSEG data.
The company’s success stems from improved refining margins and stronger refined product sales volumes during a period of global energy market turbulence.
American refiners are currently experiencing some of their most profitable margins in recent years, driven by Middle Eastern supply disruptions linked to ongoing conflicts involving Iran that have increased demand for U.S. fuel exports.
Iran’s effective blockade of the Strait of Hormuz — a vital shipping lane handling approximately 20% of worldwide oil and gas transport — has created supply concerns, elevated crude oil prices, and triggered significant volatility throughout energy markets.
American refining companies, which rely less heavily on Middle Eastern crude oil sources, are positioned to capitalize on global fuel shortages by increasing international sales from Gulf Coast facilities.
“Looking forward, we remain focused on the execution of our strategic priorities and believe each of our business segments is well positioned to take advantage of the current favorable macroeconomic backdrop,” CEO Franklin Myers said in a statement.
Industry-wide refinery margins in the United States, tracked through the 3-2-1 crack spread measurement, jumped approximately 73% during the first quarter compared to the same period last year.
HF Sinclair’s adjusted refinery gross margin reached $9.95 per barrel during the quarter, an increase from $9.12 per barrel in the previous year’s first quarter.
The company’s refining division generated an adjusted core profit of $55 million for the quarter, a significant improvement from the $8 million loss recorded during the same period last year.
Meanwhile, HF Sinclair’s renewables division posted adjusted core earnings of $133 million, reversing a $17 million loss from the prior year.
The lubricants and specialties division also showed growth, with adjusted core profits climbing to $103 million from $85 million in the previous year.
