Delek Q1 Loss Wider Than Expected, Revenues Lag Estimates

Delek US Holdings, Inc. DK reported a first-quarter 2025 adjusted net loss of $2.32 per share, wider than the Zacks Consensus Estimate of a loss of $2.27 and the year-ago quarter’s loss of 41 cents. This decline was mainly due to weaker year-over-year performance in the Refining segment. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Net revenues decreased 18.2% year over year to $2.6 billion.  The figure also missed the Zacks Consensus Estimate by $208 million.

The diversified downstream energy company’s adjusted EBITDA loss was $26.5 million, a significant decline from the $158.7 million profit in the year-ago period.

On April 29, 2025, DK’s board of directors approved the regular quarterly dividend of 25.5 cents per share. The dividend will be paid on May 19 to its shareholders of record as of March 12, 2025.

One of the big moves in this quarter was Delek Logistics Partners DKL closing its acquisition of Gravity Water Midstream on Jan. 2, which reduced DK’s ownership in DKL to 63.4%.

DKL also began commissioning the new Libby 2 plant in Lea County, NM, which will give its customers more processing capacity in a high-demand area.

On top of that, DK continued to return value to shareholders by buying back around $32 million of its own stock during the quarter.

Delek US Holdings, Inc. Price, Consensus and EPS Surprise

Delek US Holdings, Inc. price-consensus-eps-surprise-chart | Delek US Holdings, Inc. Quote

DK’s Segmental Performances

Refining: The refining segment reported an adjusted EBITDA loss of $27.4 million, a notable decline from the $110.1 million profit recorded in the prior-year quarter. Additionally, the reported figure missed our profit estimate of $19.5 million. This significant year-over-year loss was due to lower refining crack spreads. Benchmark crack spreads for Delek declined 29.8% on average in the first quarter of 2025 compared with the prior-year levels.

Logistics: This unit represents Delek’s majority interest in DKL, a publicly traded master limited partnership, that owns, operates, develops and acquires pipelines and other midstream assets.

In the first quarter, the segment registered an adjusted EBITDA of $116.5 million compared with $99.7 million in the year-ago quarter. This increase was driven by the impact of the W2W dropdown, as well as incremental contributions from the H2O Midstream acquisition on Sept. 11, 2024, and the Gravity acquisition on Jan. 2, 2025. However, the figure missed our estimate of $131.6 million.

DK’s Financials

Total operating expenses in the first quarter decreased about 10.7% year over year to $2.8 billion. Delek spent $132.6 million on capital programs in the same time frame.

As of March 31, 2025, the company had cash and cash equivalents worth $623.8 million and long-term debt of $2.8 billion, with a debt-to-total capital ratio of about 87.6.

Delek US' consolidated balance sheet for the same period included DKL, which held $2.1 million in cash and $2.1 billion in long-term debt. Excluding DKL, Delek US reported $621.7 million in cash and $889.6 million in long-term debt, yielding a net debt of $267.9 million.

DK’s Q2 and 2025 Guidance

The integrated downstream energy company anticipates operating expenses in the range of $215 million to $225 million, while general and administrative expenses are expected to fall between $52 million and $57 million in second-quarter 2025. Furthermore, the company anticipates depreciation and amortization expenses to be in the range of $95 million to $105 million. Net interest expense is projected to be between $80 million and $90 million in the second quarter.

Operationally, the company expects total crude throughput to be between 292,000 barrels per day (bpd) and 308,000 bpd, with total throughput projected in the range of 302,000-318,000 bpd in second-quarter 2025.

Looking at individual facilities, the Tyler refinery in Texas is expected to process between 73,000 bpd and 77,000 bpd, the El Dorado refinery in Arkansas between 80,000 bpd and 84,000 bpd, the Big Spring refinery in Texas between 67,000 bpd and 71,000 bpd, and the Krotz Springs refinery in Louisiana between 82,000 bpd and 86,000 bpd.

Delek US Holdings expects to generate at least $120 million in annualized cash flow improvements in the second half of 2025 as part of its Enterprise Optimization Plan. The company is also making meaningful progress in its midstream deconsolidation efforts, with new intercompany agreements unlocking more than $250 million in additional liquidity.

Looking ahead to the full year, DKL is on pace to deliver adjusted EBITDA between $480 million and $520 million, driven by strategic acquisitions and growth initiatives, including the launch of the Libby 2 plant in New Mexico.

Additionally, new intercompany transactions are expected to increase DKL’s third-party contribution to 80% on a pro-forma basis, enhancing consolidated financial liquidity by $250 million.

Both DK and DKL currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Important Earnings at a Glance

While we have discussed DK’s first-quarter results in detail, let us take a look at three other key reports in this space.

Oil and gas equipment and services provider, Liberty Energy LBRT, reported a first-quarter 2025 adjusted net income of 4 cents per share, which marginally beat the Zacks Consensus Estimate of 3 cents. Liberty's outperformance indicated operational efficiencies as well as increased utilization of frac and wireline fleets. However, the bottom line underperformed the year-ago quarter’s reported figure of 48 cents due to a decline in service activity.

As of March 31, Liberty had approximately $24.1 million in cash and cash equivalents. The pressure pumper’s long-term debt of $210 million represented a debt-to-capitalization of 9.6%.

Another oil and gas equipment and services provider, Halliburton Company HAL, posted first-quarter 2025 adjusted net income per share of 60 cents. The figure met with the Zacks Consensus Estimate but was down from the year-ago quarter’s profit of 76 cents (adjusted). The numbers reflect softer activity in the region of North America, partly offset by international growth. Meanwhile, Halliburton’s revenues of $5.4 billion decreased 6.7% year over year but beat the Zacks Consensus Estimate of $5.3 billion.

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