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Oct 27 (Reuters) - Marathon Petroleum Corp (NYSE:MPC) MPC.N reported a smaller-than-expected quarterly profit as lower margins and realized prices continued to hurt its earnings.
The company, whose operations are concentrated primarily in the Midwest, Southeast, and Gulf Coast regions of the U.S., said its refining and marketing gross margin fell nearly 38 percent to $10.75 per barrel.
Refiners have seen their margins shrink due to the narrowing price difference between U.S. Crude CLc1 and globally traded Brent futures LCOc1 , to which the price of refined products are tied.
"Despite a challenging quarter, we remain optimistic as we move forward into 2017, given the signs of market rebalancing and sustained strong demand," Chief Executive Gary Heminger said.
On an adjusted basis, quarterly profit was 58 cents per share, much below the analysts' average estimate of 81 cents per share, according to Thomson Reuters I/B/E/S.
The company also said it plans to dropdown certain assets to its midstream master limited partnership MPLX. said these assets would contribute about $350 million of annual earnings before interest, taxes, depreciation and amortization (EBITDA) by the end of 2017.
Net income attributable to Marathon Petroleum fell to $145 million, or 27 cents per share, in the third quarter ended Sept. 30, from $948 million, or $1.76 per share, a year earlier. company recorded an impairment charge of $267 million, or 31 cents per share, as the company and its partner Enbridge Inc ENB.TO shelved the Sandpiper Pipeline project.
Revenue and other income fell 12.3 percent to $16.46 billion.