Marathon Petroleum beat second-quarter profit estimates, as higher volume of crude processing and a strong midstream segment helped offset low refining margins, sending the shares of the top U.S. refiner up 4.9% before the bell on Tuesday.

It was able to process up to 16% of the country’s total demand at its 13 U.S. plants as of June even as fuel demand took a hit from lower manufacturing activity and higher renewable fuel supply.

In anticipation of higher demand, U.S. refiners had ramped up processing capacity to 93.5% in the second quarter, compared with 91% a year ago, according to the U.S. Energy Information Administration.

Weak demand hit Marathon’s refining margins that came in at $17.37 per barrel compared with $22.10 per barrel a year ago

It, however, saw a quarterly crude capacity utilization of 97%, up from 93% last year. This led to a total throughput of 3.1 million barrels per day (bpd) compared with 2.9 million bpd a year ago.

Marathon expects total refinery throughput of 2.85 million bpd for the third quarter.

“(third quarter) refinery throughput looks to be lower than street forecasts. However, Marathon’s ability to capture margin and maintain sound operating performance looks to continue,” said Peter McNally, global head of analysts at Third Bridge.

It joins rivals Phillips 66 PSX.N, Valero VLO.N, and HF Sinclair DINO.N in posting lower quarterly profits, but exceeding profit estimates on higher amount of crude processed.

Marathon’s refining and marketing core adjusted profit was 36.7% lower from a year ago on lower market crack spreads.

But its core adjusted profit for midstream segment jumped 5.7%, on higher rates, volumes and fuel moved through pipelines.

The company posted a profit of $4.12 per share for the three months ended June 30, higher than analysts’ estimates of $3.09, according to LSEG data.

Revenue from its operations jumped to $38.36 billion, higher than expectations of $35.08 billion.
Source: Reuters (Reporting by Seher Dareen in Bengaluru; Editing by Arun Koyyur)