HF Sinclair NYSE: DINO reported sharply higher third-quarter earnings as tight transportation-fuel supplies, elevated crack spreads, renewable fuel improvements and stronger lubricants performance lifted results across its portfolio.
The company posted net income attributable to shareholders of $2 billion, or $11.38 per diluted share, for the quarter ended Sept. 30. Adjusted net income was $2.1 billion, or $11.75 per diluted share, compared with $459 million, or $2.44 per diluted share, a year earlier. Adjusted EBITDA rose to $3 billion from $870 million in the prior-year quarter.
Chief Executive Officer Franklin Myers said all segments contributed to the quarter’s performance, while thanking employees and highlighting the El Dorado refinery team’s work to complete a turnaround safely and in compliance with regulations.
Refining Results Drive Quarterly Performance
HF Sinclair’s refining segment generated adjusted EBITDA of $2.6 billion, up from $661 million in the third quarter of 2025. Acting Chief Financial Officer Vivek Garg said the increase was principally driven by tight transportation-fuel supplies, higher crack spreads and benefits from small-refinery RIN waivers granted by the Environmental Protection Agency.
Crude charge averaged 614,000 barrels per day during the quarter, compared with 639,000 barrels per day in the prior-year period. Strong transportation-fuel sales in the West were partly offset by lower Mid-Continent volumes resulting from the planned El Dorado turnaround.
President and Chief Operating Officer Steve Ledbetter said roughly 4 million barrels per day of refining production was offline, including about 2.5 million barrels per day in the Middle East and 1.5 million barrels per day in Russia. He said low product inventories and reduced refining capacity have supported the market backdrop.
“The most competitive refining complex in the world is the U.S.,” Ledbetter said, adding that the company’s refinery performance has benefited from reliability improvements, commercial optimization, higher light-product yields and placing barrels into stronger markets.
Myers said the company expects shortages in product and lubricants markets to persist, citing continued limitations affecting Middle Eastern refining, the Russia-Ukraine conflict and reduced Chinese product exports. HF Sinclair does not expect a full recovery of the broader refining asset base and related products until sometime in 2028, he said.
Capital Returns, Liquidity and Spending Plans
HF Sinclair returned $572 million of cash to shareholders in the third quarter, including $93 million in regular dividends and $479 million in share repurchases. Since acquiring Sinclair in March 2022, the company has returned about $5.7 billion to shareholders and reduced its share count by more than 73 million shares, according to Ledbetter.
The board also declared a regular quarterly dividend of $0.525 per share. Garg said HF Sinclair expects to meet its target payout ratio of 50% for the full year.
Net cash provided by operating activities totaled $1.8 billion in the quarter, including $114 million of turnaround spending. Capital expenditures were $137 million. At Sept. 30, the company had approximately $5.3 billion of total liquidity, consisting of about $3.3 billion in cash and a fully undrawn $2 billion unsecured credit facility.
Debt outstanding totaled $2.8 billion, with a debt-to-capital ratio of 19% and a net debt-to-capital ratio of negative 4%.
For full-year 2026, HF Sinclair raised its capital-spending outlook to approximately $725 million for sustaining capital and turnarounds, plus $150 million for growth projects. Growth spending includes investments in Western Gateway, Westline Connect and marketing joint ventures. Fourth-quarter refinery crude runs are expected to range from 560,000 to 600,000 barrels per day, reflecting the El Dorado turnaround.
Expansion Projects and CEO Transition
Ledbetter said HF Sinclair expects to make a final investment decision in the first quarter of 2027 on the first phase of its Westline Connect project, a multi-phase Western Expansion Project. The initial phase is designed to increase capacity to move Rockies product supply into Utah and Nevada by about 35,000 barrels per day and is targeted to enter service in 2029.
The company expects to fund the project using cash on hand and operating cash flow. Ledbetter said the timing of the investment decision was shifted from the fourth quarter to allow the company to evaluate route and scope options.
At El Dorado, the company is completing a vacuum furnace project that is expected to improve reliability and product yields while enabling the refinery to process up to an additional 10,000 barrels per day of advantaged heavy crude.
HF Sinclair is also participating as an equity partner in Western Gateway, which Ledbetter said complements rather than competes with Westline Connect. He said the initiatives are intended to support supply to western markets and expand more stable, recurring cash flows from the company’s integrated value chain.
Myers also announced that Ledbetter will become president and CEO effective Jan. 1, 2027. Myers will move into an executive chair role for the first couple of quarters of 2027 to support the leadership transition and oversee activities related to the lubricants-business separation.
Renewables and Lubricants Strength
The renewables segment reported adjusted EBITDA of $109 million, excluding a $30 million lower-of-cost-or-market inventory valuation benefit, compared with a $13 million loss a year earlier. Garg attributed the improvement to higher RIN prices, increased producer tax-credit benefits and higher sales volumes. Renewable sales volumes increased to 63 million gallons from 57 million gallons.
Ledbetter said renewable diesel operations benefited from a more direct feedstock strategy, expanded markets outside California and operational improvements. The company’s renewable diesel utilization was 72% during the quarter excluding the Cheyenne turnaround, he said.
Lubricants and specialties adjusted EBITDA rose to $174 million from $78 million in the prior-year period, excluding costs related to the planned retirement of the Mississauga refinery. The segment recorded a $27 million impairment charge, $28 million in severance costs and $54 million in accelerated depreciation and amortization related to the asset retirement.
Matt Joyce, senior vice president of lubricants and specialties, said the business benefited from sales-mix optimization, stronger product and base-oil prices, pricing discipline and new customer wins. HF Sinclair expects the lubricants spin-off to be completed in the second half of 2027, with work underway on required filings, leadership positions, technology infrastructure and operating agreements.
Joyce said the standalone lubricants company is expected to use a more flexible supply model after Mississauga ceases base-oil manufacturing, while maintaining participation in the market through finished lubricants and specialties. The company said final capitalization is still being determined, but it does not intend to heavily leverage the new entity.
About HF Sinclair (NYSE:DINO)
HF Sinclair Corporation NYSE: DINO is an independent energy company engaged in refining, marketing and distributing petroleum products. The company operates refineries that process crude oil into gasoline, diesel, jet fuel, asphalt, lubricants and other specialty products. Its portfolio also includes renewable fuels activities and the production and marketing of base oils and other petroleum-based products.
HF Sinclair markets fuel under the Sinclair brand and supplies products to commercial customers, independent retailers and other wholesale and retail channels.
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