A month has gone by since the last earnings report for HF Sinclair (DINO). Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is HF Sinclair due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for HF Sinclair Corporation before we dive into how investors and analysts have reacted as of late.
DINO Q2 Earnings Beat Estimates on Refining Strength & Higher Volumes
HF Sinclair Corporation reported second-quarter 2026 adjusted earnings of $5.31 per share, up 212.4% year over year. The figure surpassed the Zacks Consensus Estimate of $4.39 by 21.0%.
Sales and other revenues increased 53.2% to $10.39 billion from $6.78 billion recorded a year ago. The top line beat the consensus estimate of $7.50 billion by 38.5%.
The strong quarterly results were driven by higher refining margins, increased refinery throughput and improved refinery utilization. The higher crude oil charge, which rose 3.9% year over year to 639,680 barrels per day (Bbl/d), further supported the strong performance.
DINO Refining Results Gain on Favorable Margins
Refining segment revenues, including intersegment sales, increased to $9.23 billion from $6.02 billion a year earlier. Segment income before interest and taxes surged to $877 million from $166 million, while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $1.02 billion from $476 million.
The increase reflected strong margins and volumes across the Mid-Continent and West regions, supported by steady demand, tight supply and favorable crack spreads. Adjusted refinery gross margin increased 57.3% to $25.95 per produced barrel sold. Refinery utilization improved to 94.3% from 90.8%, while sales of produced refined products rose to 668,670 Bbl/d from 649,210 recorded in the prior year.
HF Sinclair Renewables Performance Improves
Renewables segment revenues nearly doubled to $486 million from $258 million in the prior-year quarter. The business generated income before interest and taxes of $30 million against a loss of $4 million a year ago.
Adjusted EBITDA reached $123 million, reversing a loss of $2 million a year earlier. Results benefited from increased renewable identification number (RIN) prices, improved Producer’s Tax Credit benefits and higher volumes. Sales of produced renewables products rose to 59.9 million gallons from 54.8 million gallons, while adjusted gross margin increased to $2.46 per gallon from 36 cents per gallon.
DINO Lubricants Business Posts Strong Growth
Lubricants and Specialties segment revenues increased to $999 million from $645 million. Income before interest and taxes increased to $181 million from $33 million, and adjusted EBITDA rose to $207 million from $55 million.
The improvement was driven by higher sales volumes and product prices. Sales of produced refined products increased 24.7% to 39,847 barrels per day. The segment also recorded a $46 million first-in, first-out inventory benefit compared with a $20 million charge in the year-ago period.
HF Sinclair Marketing Volumes Rise
Marketing segment revenues increased to $1.37 billion from $826 million. Income before interest and taxes rose to $20 million from $18 million, while EBITDA improved to $28 million from $25 million.
Branded fuel sales volumes rose 14.7% to 386.7 million gallons. The number of branded sites reached 1,832 at quarter-end, up from the 1,719 recorded in the year-ago quarter. Adjusted marketing gross margin remained steady at 10 cents per gallon despite the volume expansion.
DINO Midstream Performance Remains Stable
HF Sinclair’s Midstream segment generated revenues of $167 million in the second quarter of 2026, up from the $157 million a year earlier. External customer revenues rose to $32 million from $28 million, while intersegment revenues increased to $135 million from $129 million.
Segment income before interest and income taxes was $95 million, down from the $98 million in the prior-year quarter. Adjusted EBITDA remained unchanged at $112 million. Total pipeline and terminal asset volumes increased 6.1% year over year to 2.02 million barrels per day (MMB/d) from 1.91 MMB/d, supported by higher affiliate crude pipeline and terminal volumes.
DINO Consolidated Expenses Rise on Higher Sales Activity
HF Sinclair’s total operating costs and expenses increased 42% year over year to $9.22 billion in the second quarter of 2026 from $6.51 billion. The increase mainly reflected higher cost of materials and other expenses, which rose 50% to $8.13 billion as revenues and operating activity expanded.
Operating expenses increased 14% to $654 million, while selling, general and administrative expenses rose 14% to $130 million. Depreciation and amortization edged up 1% to $228 million. Other operating expenses climbed to $47 million from $9 million, primarily reflecting an impairment charge in the Renewables segment.
Lower-of-cost-or-market inventory valuation adjustments declined to $30 million from $148 million in the year-ago quarter. Despite the higher overall expense base, sales growth outpaced cost growth, helping consolidated income from operations rise to $1.17 billion from $275 million.
DINO’s Cash Flow, Balance Sheet & Dividend
Net cash provided by operating activities totaled $1.51 billion in the quarter. Cash and cash equivalents were $2.26 billion as of June 30, 2026 while consolidated debt was $2.77 billion.
DINO returned $265 million to stockholders through dividends and share repurchases. The company paid $89 million in dividends and spent $179 million on buybacks, including excise tax. Its board raised the regular quarterly dividend 5% to 52.5 cents per share.
HF Sinclair Plans Lubricants Separation
HF Sinclair plans to separate its Lubricants and Specialties segment into an independent publicly traded company. The transaction is targeted for completion in the second half of 2027, subject to final board approval, regulatory clearances, financing and other customary conditions.
HF Sinclair intends to retire its Mississauga base oil refining assets, with the transition expected to be substantially completed during 2027. The remaining company will focus on refining, midstream, marketing and renewables, while the new lubricants business will pursue a capital-light model centered on specialty products, brands and customer relationships.
DINO Sees Positive Third-Quarter Backdrop
HF Sinclair expects the favorable fundamentals that supported its strong second-quarter performance to persist into the third quarter of 2026. Management pointed to steady demand, tight refined-product supply and favorable crack spreads as supportive factors for refining operations.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 19.67% due to these changes.
VGM Scores
At this time, HF Sinclair has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise HF Sinclair has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
HF Sinclair belongs to the Zacks Oil and Gas - Refining and Marketing industry. Another stock from the same industry, Equinor (EQNR), has gained 0.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
Equinor reported revenues of $35.18 billion in the last reported quarter, representing a year-over-year change of +39.9%. EPS of $1.33 for the same period compares with $0.64 a year ago.
For the current quarter, Equinor is expected to post earnings of $1.46 per share, indicating a change of +294.6% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Equinor has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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This article originally published on Zacks Investment Research (zacks.com).