CVR Energy Q2 Revenue Beats by 4%

CVR Energy (CVI -0.52%), a diversified company engaged in petroleum refining, renewable fuels, and nitrogen fertilizer production, released its earnings for the second quarter on July 30, 2025. The company reported GAAP revenue of $1,761 million, which was above the analyst consensus of $1,688.8 million (GAAP). However, its adjusted earnings per share (EPS) came in at a loss of $(0.23), missing non-GAAP EPS estimates that expected a narrower loss of $(0.13). The period was marked by a net loss attributable to shareholders of $114 million (GAAP), reflecting significant operational impacts, including regulatory charges and a major refinery turnaround. Despite these challenges, adjusted EBITDA -- a key measure of operational performance -- rose to $99 million, a 13.8% increase from Q2 2024. Overall, the quarter evidenced progress in certain operational segments, but bottom-line results and cash flow remained pressured by external and internal disruptions.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Strategic Focus

CVR Energy operates across three major segments: petroleum refining, renewable fuels, and nitrogen fertilizers. Its refineries in Coffeyville, Kansas, and Wynnewood, Oklahoma, give it a significant presence in high-value transportation fuels. The renewables segment focuses on converting biological feedstocks into renewable diesel, while the fertilizer business is critical for supplying ammonia and urea-ammonium nitrate (UAN) products to agricultural markets.

Recently, CVR Energy has focused on expanding renewable diesel capacity and leveraging its unique logistical position in the fertilizer market. Key factors for its success include managing exposure to commodity price swings, regulatory mandates -- especially in renewables and fuels -- and maintaining cost advantages in production and distribution. Ongoing compliance with regulations and adapting to evolving environmental policies are also central to the company's operations.

Quarter in Detail: Drivers and Developments

During Q2 2025, the petroleum segment faced a significant challenge from a planned turnaround at the Coffeyville refinery, completed in April, which reduced throughput to 172,000 barrels per day from 186,000 in the prior year. The reported refining margin dropped sharply to $2.21 per barrel, down from $10.94 last year. This decline included a pre-tax $89 million loss tied to obligations under the Renewable Fuel Standard (RFS), a federal program that requires refiners to blend renewable fuels into the fuel supply or buy compliance credits known as Renewable Identification Numbers (RINs). Adjusted refining margins (non-GAAP), which remove the effects of regulatory mark-to-market and inventory valuation swings, improved modestly to $9.95 per barrel from $9.81 per barrel in Q2 2024, reflecting more favorable underlying industry conditions. Direct operating expenses in the segment also improved, falling to $6.45 per throughput barrel from $6.94 in Q2 2024, even as the turnaround increased near-term costs.

The renewables segment, focused on renewable diesel production, continued to operate below breakeven after adjusting for regulatory incentives, with an adjusted EBITDA loss of $4 million. Throughput climbed to 155,000 gallons per day, up from 127,000 in Q2 2024, aided by improved catalyst performance and higher renewable credit prices. The segment posted a net loss of $11 million (GAAP), flat year over year, though adjusted EBITDA loss widened slightly. The loss of the Blender’s Tax Credit (BTC) continued to weigh on results, and management refrained from booking the new Production Tax Credit (PTC), citing regulatory uncertainty. Utilization of renewable capacity improved to 61.4%, up from 50.2% in Q2 2024, but the segment remains heavily dependent on shifting government policy and credit values.

The nitrogen fertilizer segment delivered stronger results despite some operational setbacks. Net income for the segment increased to $39 million from $26 million the prior year on higher realized prices for ammonia and UAN products, both critical fertilizers. Ammonia prices rose 14% to $593 per ton, and UAN prices increased 18% to $317 per ton. Production dipped, with ammonia output at 197,000 tons versus 221,000 tons in Q2 2024, but higher prices offset these volume declines, and EBITDA improved to $67 million from $54 million for Q2 2024.

Regulatory and compliance costs significantly affected company-wide profitability during the period. The RFS obligation's mark-to-market adjustment resulted in an $89 million pre-tax charge, demonstrating continued volatility from U.S. fuel blending mandates. The company also noted ongoing capital investment in environmental upgrades, such as replacing hydrofluoric acid processes at Wynnewood to meet evolving safety and compliance standards. No one-time insurance recoveries or similar adjustments were noted as offsetting these regulatory costs, keeping the company exposed to swings in regulatory and credit markets.

Leadership changes also featured in the quarter. Dave Lamp announced his retirement as chief executive officer, with Mark Pytosh set to take over in January 2026. Brett Icahn was appointed to the board of directors, increasing the influence of Icahn Enterprises, the company’s majority holder, which owns about 67% of outstanding shares.

Look Ahead: Guidance and Trends

Management provided operational guidance for the coming quarter, but did not issue forecasts for revenue or earnings. It expects petroleum segment throughput of 200,000 to 215,000 barrels per day, with crude utilization rates between 92% and 97%. For renewables, planned throughput is 16 million to 20 million gallons with utilization of 70% to 87%. In the fertilizer segment, management anticipates ammonia utilization rates of 93% to 97%. Consolidated capital expenditure is set between $47 million and $60 million.

Key points for investors to monitor include the normalization of operations following the refinery turnaround and clarity on renewable credit regulations. Cash flow remains a concern as free cash flow (non-GAAP) turned negative by $12 million, and the company’s cash position (GAAP) declined to $596 million at June 30, 2025, from $987 million at December 31, 2024. The company's leadership emphasized its intent to reduce debt and restore targeted leverage ratios, but it did not provide clear guidance on when it might reinstate dividends to shareholders.

CVR Energy does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.