* Profit tops estimates for second quarter in a row
* Q2 refinery margins up to $17.42/bbl from $14.54
* Company had made failed bid and rebuffed an offer
* Shares rise about 5 pct, adding to 25 pct gain YTD
* Price rise makes company expensive target-analyst (Adds CEO and analyst comment, details on acquisition talks)
By Amrutha Gayathri
Aug 5 (Reuters) - HollyFrontier Corp posted a better-than-expected profit for the second straight quarter, showing that the U.S. refiner had put behind it a disruptive start to the year when it made a failed attempt at an acquisition and rebuffed a takeover offer.
HollyFrontier was among the bidders for Citgo Petroleum Corp, Venezuela's U.S. oil refining unit, late last year and the target of Tesoro Corp in the first quarter. Neither deal worked out.
"Obviously (the Citgo acquisition) didn't work out and we needed to make a strategic shift," Chief Executive Mike Jennings said on a post-earnings call on Wednesday.
That shift has seen the company focusing on its refineries in the Rocky Mountain region and in the Southwestern United States, which led to strong results in the past two quarters compared with lower-than-expected profit in the last two quarters of 2014.
Refining has remained a bright spot during the year-long crude oil price rout as low gasoline prices have led to an increase in driving, bolstering the companies that turn cheap crude into valuable products like gasoline and diesel.
HollyFrontier, like other refiners, is benefiting from high crack spreads - the price difference between crude and refined products - in the West Coast, where it sells its products. This leads to strong refining margins.
The company shares were up 5 percent in late morning trading, adding to the 25 percent it had already gained this year. But the rise could mean HollyFrontier is now too expensive an acquisition target.
"They no longer represents that much value to a potential buyer, compared to six months ago, when there was potential to boost the company's operations," said RBC Capital Markets analyst Brad Heffern.
Refiners are running plants at full tilt, squeezing the remaining dollars from strong gasoline demand before the busy summer transitions into the seasonally slower winter.
HollyFrontier said it expects to run its Rocky Mountain refineries at full capacity in the longer term. The company's utilization rate in the region fell to 74.8 percent in the second quarter from 84.7 percent a year earlier.
But consolidated refinery gross margin rose to $17.42 per produced barrel from $14.54.
Net income attributable to HollyFrontier's shareholders more than doubled to $360.8 million, or $1.88 per share.
Excluding items, it earned $1.45 per share, beating analysts average estimate of $1.30, according Thomson Reuters I/B/E/S.
Sales and other revenue declined about 31 percent to $3.70 billion. (Editing by Don Sebastian and Savio D'Souza)