PBF Energy (PBF -3.98%), an independent petroleum refiner and supplier of transportation fuels, released its second quarter 2025 earnings on July 31, 2025. The report highlighted a mixed quarter: non-GAAP earnings per share were $(1.03), better than the analyst consensus non-GAAP loss of $(1.26), and revenue was $7.48 billion, beating estimates by more than $500 million. Still, both earnings and revenue were down from the prior year, with revenue declined 14.4% year over year. The quarter was shaped by the continued partial shutdown of the Martinez refinery and operational headwinds, with insurance proceeds from the Martinez incident softening the impact of operating losses. Overall, results beat analyst estimates, but the company's core profitability remained negative after adjusting for insurance and other special items.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $(1.03) | $(1.26) | $(0.54) | (90.7 % decrease) |
| Revenue (GAAP) | $7.47 billion | $6.97 billion | $8.74 billion | (14.4 %) |
| Income from Operations (GAAP) | $43.0 million | $(74.6) million | NM | |
| EBITDA (Non-GAAP) | $51.8 million | $86.2 million | (39.9%) | |
| Gross Refining Margin per Barrel (Non-GAAP) | $8.38 | $8.12 | 3.2% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Key Priorities
PBF Energy (PBF -3.98%) operates six petroleum refineries across the United States, with a combined processing capacity near 1 million barrels per day as of December 31, 2024. Its operations produce gasoline, diesel, jet fuel, and other refined products. A central competitive factor is the Nelson Complexity Index—a measure of a refinery’s ability to upgrade lower-cost crude into high-value products. PBF’s average complexity is high, providing flexibility and resilience through changing market cycles.
The company’s recent focus has centered on operational efficiency, cost containment, maintaining safe and reliable operations, and restoring damaged assets. Key priorities include managing the cost of regulatory compliance, improving operating expenses, and deploying the Refining Business Improvement (RBI) initiative that aims to identify and capture over $200 million in annualized run-rate savings. Effective management of feedstock supply and logistics is also critical for sustainability.
Quarter in Review: Performance Drivers and Challenges
This quarter was defined by ongoing fallout from the Martinez refinery fire that occurred earlier in 2025. Production averaged 845,800 barrels per day, down from 926,700 barrels per day in the same quarter last year. The Martinez facility operated at limited capacity in the 85,000–105,000 barrels per day range as repairs advanced, restricting West Coast system throughput. West Coast throughput dropped sharply year over year, landing at 203,500 barrels per day compared to 296,700 barrels per day in Q2 2024, while gross margin per barrel in that region swung from a positive $0.34 in Q2 2024 to a negative $(9.54) (GAAP basis) due to both the outage and higher compliance costs.
System-wide, the gross refining margin per barrel was $8.38, but GAAP gross margin was negative, reflecting the heavy effect of Martinez-related charges. Operational expense per barrel increased to $7.96 from $6.94 in Q2 2024, with West Coast expenses especially elevated at $15.73 per barrel. Despite these pressures, an insurance recovery payment of $250 million helped offset Martinez losses in the reported results. Management expects full Martinez operations to be restored by year-end 2025, depending on regulatory and supply chain timelines.
Market dynamics continued to challenge overall performance. The Brent crude oil price averaged $67.70 per barrel (down from $85.02 in Q2 2024), but narrow light-heavy crude price differentials eroded potential cost advantages for complex refineries like PBF’s. The proportion of heavy crude processed fell to 25%, limiting feedstock flexibility. Meanwhile, Renewable Identification Number (RIN) costs—an environmental compliance expense tied to U.S. renewable fuel requirements—jumped from $3.38 to $6.14 per barrel-equivalent year over year, significantly inflating compliance costs, especially for California operations facing strict state rules.
Supply and market conditions are also shifting. California faces a shrinking in-state supply as additional refinery closures approach, with management projecting the need to import over 250,000 barrels per day of gasoline to meet demand by next year. PBF’s refineries, including Martinez once full production resumes, are expected to remain essential suppliers to that market. The Logistics segment delivered stable revenue of $98 million, and PBF sold two non-core terminals for $175 million—a transaction at more than 10 times EBITDA, according to management, with the sale agreement announced April 30, 2025. Notably, these terminal sales will not disrupt refining operations, as access is maintained through long-term contracts.
The Renewable Diesel segment, operated in a joint venture with St. Bernard Renewables (SBR), produced an average of 14,200 barrels per day of renewable diesel—a biofuel made from fats and oils. Management guided for further growth in the next period. Despite management expecting improved margins as higher RIN prices support the economics of renewable diesel going forward.
Balance sheet pressures persisted as reduced free cash flow and insurance-timing differences drove up total debt to $2.39 billion as of June 30, 2025, compared with $1.46 billion as of December 31, 2024. The total debt to capitalization ratio rose to 31% as of Q2 2025 from 20% as of Q4 2024, and net debt to capitalization increased to 26% as of June 30, 2025. Working capital outflows and Martinez-related expenses weighed on cash flow, but insurance recoveries and terminal sale proceeds should support liquidity in coming quarters. The company maintained its quarterly dividend at $0.275 per share, unchanged despite recent losses.
Looking Ahead: Guidance and Investor Considerations
For Q3 2025, management forecasts throughput of 865,000–915,000 barrels per day, up from 839,100 barrels per day in Q2 2025 but still trailing last year’s levels. The company reaffirmed full-year 2025 capital expenditure guidance at $750–775 million, excluding Martinez repairs, which will be completed under insurance coverage. PBF expects the benefits of its cost-saving RBI initiative to accelerate into 2026, targeting over $350 million in run-rate savings by year-end 2026.
No additional formal forward earnings guidance was issued for fiscal 2025. Management noted ongoing market volatility, particularly in crude spreads and regulatory costs, as key watch points for future quarters. Delays or added regulatory burdens could continue to constrain performance, particularly on the West Coast. Full reliance on insurance proceeds for Martinez recovery and successful execution of cost initiatives are central to management’s current strategy.
PBF does pay a dividend. The quarterly dividend was maintained at $0.275 per share, unchanged from previous quarters.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
