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Marathon Pete to Sell Gas Stations for $21B - Earnings Are Mixed

Marathon Petroleum is set to sell its gas stations for $21 billion cash to 7-Eleven Inc., a subsidiary of Japan’s Seven & I Holdings.

Marathon Petroleum  (MPC) - Get Marathon Petroleum Corporation (MPC) Report shares rose Monday, after the oil refiner reached a deal to sell its Speedway gas-station chain for $21 billion and reported earnings that were mixed compared with expectations.

It agreed to sell the gas stations for $21 billion cash to 7-Eleven Inc., a subsidiary of Japan’s Seven & I Holdings.

“Our announcement crystallizes the significant value of the Speedway business, creates certainty around value realization and delivers on our commitment to unlock the value of our assets,” Marathon Chief Executive Michael Hennigan said in a statement.

“The establishment of a long-term strategic relationship with 7-Eleven creates opportunities to improve our commercial performance."

As for the earnings, Marathon reported profit of $9 million, or 1 cent a share, for the latest quarter, down from $1.1 billion, or $1.66 a share, in the year-earlier quarter. The coronavirus pandemic has crushed demand for gasoline, as consumers stay home.

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Marathon posted an adjusted loss of $1.33 a share for the latest quarter, smaller than the consensus estimate of a $1.77 loss in a survey by FactSet.

Marathon’s revenue sank 55% to $15.02 billion in the second quarter from $33.53 billion in the year-earlier quarter. The latest figure lagged the FactSet consensus analyst forecast of $21.73 billion.

"Our second-quarter results reflect a full three months of the challenges covid has created for our business," Hennigan said in a statement. 

"We began April with demand at historic lows. Despite seeing some recovery during the quarter, demand for our products and services continues to be significantly depressed, particularly across the West Coast and Midwest." 

Marathon shares recently traded  at $39.74, up 4%. They'd dropped 37% in 2020 through Friday.