Marathon Petroleum missed Wall Street estimates for third-quarter profits, as higher refining turnaround costs and renewable diesel losses weighed on performance.
Shares of Marathon, the top U.S. refiner by volume, were down about 7% at 1:30 p.m. ET (1830 GMT).
Marathon's results underscored the challenge facing U.S. refiners as elevated maintenance costs and inflation eat into earnings despite strong demand and wider margins.
The company reported a profit of $3.01 per share for the quarter, compared with analysts' average estimate of $3.15 per share, according to data compiled by LSEG.
The results were disappointing as the rare earnings miss came amid outperformance by peers, analysts said. Valero Energy, Phillips 66 and HF Sinclair reported better-than-expected results on a rebound in refining margins.
HIGHER COSTS WEIGH ON RESULTS
Marathon reported $400 million in quarterly refining turnaround costs, up from $287 million a year ago, mainly due to higher planned maintenance activity.
Turnaround expense for the fourth quarter is projected to be around $420 million, with activity mainly focused on the West Coast, the company said.
Refining operating costs were $5.59 per barrel for the third quarter of 2025, up from $5.23 per barrel a year ago.
For the Gulf Coast, the refiner reported a jump in operating costs to $4.70 per barrel, up from $3.96 per barrel a year ago.
Downtime at the Galveston Bay refinery, the second-largest by capacity in the U.S., due to a fire in June impacted the Gulf Coast capture rate and overall results, John Quaid, chief financial officer, told investors on Tuesday.
Marathon expects to spend $200 million this year on a project to upgrade Galveston Bay's distillate processing unit, with another $575 million planned for the next two years.
Refining and marketing margin was at $17.60 per barrel during the quarter, up from $14.63 per barrel a year earlier. However, analysts noted third-quarter West Coast refining margins of $947 million were lower than expected.
The refiner's renewable diesel segment reported another quarterly loss of $56 million, compared with a $61 million loss a year ago. Results were impacted by weak margins in the third quarter due to higher feedstock prices, executives said.
In the third quarter, Marathon ran its 13 refineries at 95%, up from 94% a year ago, the company said. It plans to operate its facilities at 90% of their combined capacity in the fourth quarter of 2025.
