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HF Sinclair (DINO) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Energy· May 1, 2026

Source: earnings call transcript

Executive summary

HF Sinclair Q1 FY26 — Strong Operational Performance and Shareholder Returns

HF Sinclair delivered strong Q1 FY26 results, driven by robust operational performance across its refining and renewables segments, despite challenging weather and market volatility. The company continues to execute on its integrated value chain strategy, focusing on reliability, cost efficiencies, and strategic growth in marketing and lubricants, while maintaining a strong commitment to shareholder returns amidst ongoing leadership transitions.

Highlights

5

  • Adjusted EBITDA for Q1 FY26 was $426 million, up from $201 million in Q1 FY25.

  • Adjusted net income for Q1 FY26 was $127 million, or $0.69 per diluted share, compared to an adjusted net loss of $50 million, or negative $0.27 per diluted share in Q1 FY25.

  • Refining crude charge averaged 613,000 barrels per day, at the upper end of guidance, despite heavy turnaround and harsh winter weather.

  • Returned $167 million in cash to shareholders in Q1 FY26, consisting of $91 million in dividends and $76 million in share repurchases.

  • Since March 2022, the company has returned over $4.9 billion in cash to shareholders and reduced share count by over 66 million shares.

Concerns

3

  • Lubricants segment experienced unprecedented cost inflation across its product portfolio, requiring multiple pricing actions.

  • Midstream segment adjusted EBITDA decreased to $111 million from $119 million in Q1 FY25, primarily due to a fuel contamination incident.

  • Middle East conflict created substantial and material disruption, leading to market volatility.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Capital Spending
No change
high materiality
High
Q2 2026 Crude Oil Runs
600,000 to 630,000 barrels per day
high materiality
High
Annual Branded Sites Growth
approximately 10% annually
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Refining
Increased adjusted EBITDA driven by higher adjusted refinery gross margins in the West region and increased refined product sales volume, partially offset by lower margins in the Mid-Con. Small refinery RINs waiver increased adjusted gross margin by $21 million.
Crude charge: 613,000 barrels per day (Q1 FY26)Crude charge: 606,000 barrels per day (Q1 FY25)Adjusted EBITDA (excluding LCM): $55 million (Q1 FY26)Adjusted EBITDA (excluding LCM): -$8 million (Q1 FY25)Adjusted refinery gross margins: higher in West regionAdjusted refinery gross margins: lower in Mid-ConRefined product sales volume: increased
———$55 million adjusted EBITDA
Renewables
Significant increase in adjusted EBITDA driven by increased sales volume, higher adjusted renewable gross margins due to narrowing Boho spread, higher RINs prices, and recognition of prior year producers tax credit benefits.
Adjusted EBITDA (excluding LCM): $133 million (Q1 FY26)Adjusted EBITDA (excluding LCM): -$17 million (Q1 FY25)Total sales volumes: 52 million gallons (Q1 FY26)Total sales volumes: 44 million gallons (Q1 FY25)Producers tax credit benefits: $49 million (prior year production, recognized Q1 FY26)
———$133 million adjusted EBITDA
Marketing
Slight increase in EBITDA driven by higher branded fuel sales volume and progress in integrating the Green Trail Fuels JV, adding new branded sites.
EBITDA: $28 million (Q1 FY26)EBITDA: $27 million (Q1 FY25)Total branded fuel sales volume: 325 million gallons (Q1 FY26)Total branded fuel sales volume: 294 million gallons (Q1 FY25)Branded sites added: 25 (Q1 FY26)Contracted sites: >100 (expected online 6-12 months)
———$28 million EBITDA
Lubricants and Specialties
Increase in adjusted EBITDA primarily due to a large FIFO benefit, partially offset by dislocation between rising feedstock costs and product sales price increases.
Adjusted EBITDA: $103 million (Q1 FY26)Adjusted EBITDA: $85 million (Q1 FY25)FIFO benefit: $53 million (Q1 FY26)FIFO benefit: $8 million (Q1 FY25)
———$103 million adjusted EBITDA
Midstream
Decrease in adjusted EBITDA primarily driven by marginally higher operating costs resulting from a fuel contamination incident at a Colorado product terminal.
Adjusted EBITDA: $111 million (Q1 FY26)Adjusted EBITDA: $119 million (Q1 FY25)
———$111 million adjusted EBITDA

DINO operating KPIs by quarter

DINO operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Turnaround spend
$119M Net cash provided by operations totaled $457 million in the first quarter, which included $119 million of turnaround spend. Source: earnings call transcript
$56M Net cash provided by operations totaled $1.5 billion in the second quarter, which includes $56 million of turnaround spend. Source: earnings call transcript
-52.9%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Share repurchase authorization under 2024 share repurchase program Q1 FY26

Company will opportunistically repurchase shares.

Deals & partnerships

Green Trail Fuels JV Integration of previously announced JV to accelerate growth of Sinclair brand and expand footprint.

Added 25 branded sites in Q1, with over 100 sites contracted for the next 6-12 months.

Industrial Oils Unlimited Acquisition to high-grade molecules and move into more specialized finished lubricants and specialties applications.

Part of the strategy to tuck in opportunities for acquisition in the lubricants segment.

Capital programs

Puget Sound diesel/jet swing flexibility project completed

Benefit:7,000 barrels per day swing capacity between diesel and jet

Successfully brought on another project enabling flexibility to swing approximately 7,000 barrels per day between diesel and jet, depending on the market environment. This is paying off given the current market conditions.

El Dorado vacuum furnace project underway

Benefit:improved reliability and yield, incremental 10,000 barrels per day of heavy crude into the mix

Expected to come online as part of the fall turnaround.

Risks & headwinds

Middle East military conflict ongoing

substantial and material disruption to the crude oil and other necessary prior the advancement of markets around the world

Mitigation:Company remains focused on addressing any challenges to serve customers and remains nimble to address market volatility.

Lubricants cost inflation Q1 FY26, protracted into Q2 and Q3

unprecedented cost inflation across our product portfolio both in magnitude and the rate at which it occurred

Mitigation:Implemented multiple pricing actions aimed at recovering higher costs; supply chain remains secure.

Midstream fuel contamination incident Q1 FY26

marginally higher operating costs

RVO burden ongoing

projected to be $50 billion a year or an equivalent of $0.30 per gallon

Mitigation:Company has petitions out for 5 refineries for SREs, believes in the program, and is actively involved in discussions for solutions.

Demand destruction from high product prices near-term, summer driving season

some slight consider softness as we head in the driving season

Mitigation:Watching very closely; prompt resolution of global conflicts would be more beneficial.

Geopolitical events impacting crude spreads Q1 FY26, likely to continue

Brent-TI spread widening given the geopolitical elements

Mitigation:Managing carefully to get into the right markets and ensure margin coverage for increased cost.

What to watch in Q2 FY26

El Dorado vacuum furnace project completion

Fall turnaround
Current underway
Target online

Why it matters

This project is expected to improve reliability and yield, allowing for an incremental 10,000 barrels per day of heavy crude into the mix, impacting refining profitability.

We continue to advance the El Dorado vacuum furnace project to provide improved reliability and yield while allowing up to an incremental 10,000 barrels per day of heavy crude into the mix. This project is expected to come online as part of the fall turnaround.

Find out whether DINO delivers this. Inve re-checks your case every morning.

Q&A highlights

What drove strong Q1 renewables results, what's the Q2 utilization target, and are stronger margins expected?

Steve Ledbetter attributed strong renewables performance to feedstock strategy, market placement (Pacific Northwest, Canada), OpEx discipline, catalyst optimization, and favorable market conditions. He indicated Q2 utilization would be north of 70% net of planned events.

“We're not going to guide specifics, but we do believe that we will optimize particular co-located kits to the best value, and we see that being north of 70% utilization, net of all of the planned events that we have.”

asked by Matthew Blair · answered by Steven Ledbetter

2 min read 7 chapters

Detailed narrative

Management Transition and Strategy Continuity

Franklin Myers is serving as interim CEO and President following leaves of absence by the CEO and CFO. The Board is diligently addressing future leadership. The current executive team is committed to continuing the successful performance and strategy established in 2021-2022, focusing on operational excellence and integrated value chain.

Middle East Conflict Impact

The ongoing military conflict in the Middle East has created substantial disruption to crude oil markets, leading to increased volatility. The company acknowledges the stress this creates and remains focused on addressing challenges to serve customers, emphasizing nimbleness in response to market events.

Refining Operations and Turnarounds

The refining segment completed two turnarounds at Puget Sound and Woods Cross refineries in Q1 FY26, running crude charge at 613,000 barrels per day despite harsh winter weather. No planned turnarounds are scheduled until the El Dorado turnaround in late Q3. The company is encouraged by refining margin strength and is well-positioned for the summer driving season.

Renewables Segment Optimization

The Renewables segment delivered strong financial performance through commercial and operational optimization. This included a successful feedstock strategy, molecule high-grading, and operational excellence. Management remains optimistic about LCFS, D4 RINs, and producers tax credits supporting renewable diesel margins.

Lubricants Segment Cost Pressures

The Lubricants and Specialties segment faced unprecedented cost inflation across its product portfolio in Q1 FY26. The team implemented multiple pricing actions to recover these higher costs and expects to continue pursuing additional price recovery in Q2 as elevated cost pressures persist, while maintaining a secure supply chain.

Marketing Segment Growth

The Marketing segment is making progress with the integration of the Green Trail Fuels JV, aiming to accelerate growth of the Sinclair brand and expand its footprint. The company added 25 branded sites in Q1, with over 100 sites contracted for the next 6-12 months, and expects to grow branded sites by approximately 10% annually.

Strategic Projects and Flexibility

HF Sinclair continues to advance strategic projects, including a multiphase project to leverage Rockies logistics for Western markets. A project at Puget Sound enables flexibility to swing approximately 7,000 barrels per day between diesel and jet, proving beneficial in current market conditions. The El Dorado vacuum furnace project, expected online in fall, will improve reliability and yield, allowing for an incremental 10,000 barrels per day of heavy crude.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.