Marathon Petroleum (NYSE:MPC) is still in the middle of a major strategic review of its corporate structure. Management has communicated what it plans to do with its stake in master limited partnership MPLX (NYSE:MPLX), but there is still the issue of what it will do with its retail and fueling station business. 

For now, though, the company's second-quarter earnings reflected that these two nonrefining business segments are indeed valuable to the bottom line, as they helped offset another challenging quarter for refining. Here's a look at Marathon's most recent results.

Oil refnery at night

Image source: Getty Images.

By the numbers

Metric Q2 2017 Q1 2017 Q2 2016
Revenue $18.35 billion $16.39 billion $16.79 billion
EBITDA  $1.64 billion $896 million $1.95 billion
Net income  $515 million $30 million $801 million
EPS $1.00 $0.06 $1.51

Data source: Marathon Petroleum earnings releases. EBITDA = earnings before interest, taxes, depreciation, and amortization.

An uncommonly large amount of maintenance and turnaround work heavily influenced Marathon's first-quarter earnings. This quarter, though, that trend was reversed as the company recorded a utilization rate of 103%. The setback was weaker margins. This isn't unique to Marathon, however, as weak margins have had a negative impact on almost all U.S. refiners lately. Even though crude oil is relatively cheap, the U.S. is swimming in oversupplies of refined products that have kept prices down and margins razor-thin for refiners. 

Thankfully, though, Marathon's nonrefining assets are large enough -- and run well enough -- to offset weakness in the refining segment. Its Speedway marketing segment had one of its best results ever. Also, its midstream business, which mostly comprises its investment in MPLX, continues to grow from Marathon dropping down assets and investing in its own growth projects. 

MPC operating income by business segment for Q2 2016, Q1 2017, and Q2 2017. Shows steady improvement in Speedway and Midstream, offsetting declining Refining results

Image source: Marathon Petroleum earnings release. Chart by author.

Marathon is in the middle of a major restructuring that will involve several transactions with MPLX to move all midstream assets to the subsidiary as well as exchange its general partnership ownership -- and the incentive distribution rights that go with it -- for an even larger share of limited partner units. Those sales and dropdowns should net Marathon a huge chunk of cash -- $9 billion to $11 billion -- to play with. 

It's apparent what the company wants to do with all this excess cash: Buy back stock. On May 31, the board of directors authorized a $3 billion share repurchase program. That authorization is on top of the $2.1 billion that remains on the previous buyback plan. That means the company has the authorization to buy back 17% of the company's market cap right now.

Marathon's board and management team believe fervently in share repurchases as a way to lift shareholder returns. Ever since the company was spun out of Marathon Oil back in 2010, management has repurchased 26% of all shares outstanding. Toss on this recent repurchase authorization and the likely chance that further asset sales will go toward share repurchases, and Marathon is really going out of its way to reduce its share count.

What management had to say

CEO Gary Heminger's comment on the refining market is similar to other statements from refining company executives this quarter. He sees the refining market getting better from here:

Looking forward, we believe the U.S. and global macroeconomic picture remains favorable and we expect good underlying economic growth will continue to support strong demand for our products. With top-tier, strategically located assets with export access, MPC is well-positioned to meet the energy needs of the markets and to continue to drive long-term value for shareholders.

How long this better refining market lasts is anyone's guess, but refined product inventories are on the decline and crude oil prices have remained suppressed thanks to shale drilling quickly backfilling production declines in other parts of the world. These conditions could make for better refining margins for at least a quarter or two.

What a Fool believes

Marathon is still a company in corporate structure flux. On top of the MPLX restructuring, management is also conducting a strategic review of its Speedway assets that may lead to a spinoff as well. Even though Marathon continues to buy back gobs of stock and grow its dividend by double digits, it's hard to make a definitive investment decision when so many significant profit centers are up in the air. Once we get a plan for Speedway, even if that plan is to remain as is, then we can make a more lasting decision about Marathon Petroleum.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.