Delek Logistics Partners LP (NYSE:DKL) reported financial results for the third quarter of 2025, delivering revenue that surpassed analyst expectations while earnings per share fell short of consensus estimates. The market reaction reflected this mixed performance, with the stock showing modest declines in pre-market trading following the announcement.
Earnings and Revenue Performance
The midstream energy partnership reported third-quarter revenue of $261.3 million, exceeding analyst estimates of $254.9 million. This represents a significant increase from the $214.1 million reported in the same quarter last year, driven by contributions from recent acquisitions and increased wholesale margins.
However, the company's earnings performance told a different story. Delek Logistics reported diluted earnings per share of $0.85 for the quarter, missing the analyst consensus estimate of $1.00. This came despite a substantial improvement from the $0.71 per share reported in the third quarter of 2024.
Key financial metrics from the quarter include:
- Net income of $45.6 million, up from $33.7 million year-over-year
- Adjusted EBITDA of $136.0 million, compared to $106.8 million in Q3 2024
- Distributable cash flow of $74.1 million, up from $62.0 million
- Net cash provided by operating activities of $54.9 million versus $24.9 million
Market Reaction and Price Action
The market response to these results has been cautious, with the stock declining approximately 1.1% in pre-market trading. This reaction appears to reflect investor concern over the earnings miss despite the revenue beat. The stock had shown positive momentum in recent weeks, gaining 1.6% over the past month and 3.1% over the past week, suggesting investors were anticipating stronger results.
Operational Highlights and Segment Performance
Delek Logistics demonstrated robust operational performance across several business segments. The company achieved record crude gathering volumes in its Delaware Business and made significant progress on developing sour gas gathering and acid gas injection capabilities at the Libby Complex.
Segment performance showed varied results:
- Gathering and Processing segment Adjusted EBITDA increased to $82.8 million from $55.0 million, primarily due to acquisitions
- Wholesale Marketing and Terminalling segment Adjusted EBITDA decreased to $21.4 million from $24.7 million
- Storage and Transportation segment remained stable at $19.3 million
- Investments in Pipeline Joint Ventures generated income of $21.9 million, up from $15.6 million
Updated Guidance and Future Outlook
Management expressed confidence in the company's trajectory by raising full-year 2025 EBITDA guidance to $500-$520 million, reflecting the strong performance through the first three quarters. This updated guidance suggests management expects continued operational strength through the remainder of the year.
The company also announced its 51st consecutive quarterly distribution increase, raising the payout to $1.120 per unit, representing a 0.4% increase from the previous quarter and a 1.8% year-over-year increase. This consistent distribution growth remains a key attraction for income-focused investors in the master limited partnership.
Financial Position and Leverage
As of September 30, 2025, Delek Logistics maintained a leverage ratio of approximately 4.44x, with total debt of $2.3 billion and cash of $6.9 million. The company had substantial liquidity with $1.0 billion of additional borrowing capacity available under its $1.2 billion revolving credit facility.
For investors seeking more detailed earnings analysis and future estimates, additional information is available on the DKL earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. The information presented should not be interpreted as a recommendation to buy or sell any security. Investors should conduct their own research and consult with a financial advisor before making investment decisions.
