Tesoro Doubles Prior-Year Second Quarter Earnings
SAN ANTONIO--(BUSINESS WIRE)--Aug. 2, 2001--Tesoro Petroleum Corporation (NYSE:TSO - news) today reported net earnings for the 2001 second quarter of $30 million, or $0.70 per diluted share, which is double the $0.35 recorded for the second quarter 2000.
``Our outstanding results this quarter were driven by very strong margins for the first two months of the quarter in combination with record-high refinery throughput of 260 thousand barrels per day,'' stated Bruce A. Smith, Chairman, President and CEO.
Operating profit for the Refining and Marketing segment increased by 60 percent to $65 million, compared to the 2000 second quarter. Tesoro's refinery spread of $7.74 per barrel for the 2001 second quarter was 23 percent above the prior year quarter, primarily driven by higher gasoline and diesel fuel margins. Margins benefited from concerns that supply would be inadequate to meet seasonal gasoline demand. Partially offsetting these benefits were increased operating expenses for fuel and utility costs and marketing-related employee costs.
Operating profit for the Marine Services segment was a record $3 million, an increase of 65 percent compared to the second quarter of 2000. The increase in operating profit was due to increased service revenues as a result of significantly higher drilling activity in the Gulf of Mexico compared to the prior year.
Six Months Results
Net earnings for the first six months of 2001 were $51 million, or $1.22 per diluted share. This is more than double the results for the first half of 2000, which had net earnings of $24 million, or $0.56 per diluted share.
Operating profit for the first six months increased by 61 percent to $124 million, compared to the same period last year. The increased operating profit resulted mainly from a 25 percent increase in refinery product spread combined with a five percent increase in refinery throughput to a record-high, first-half level. These benefits were partly offset by a 10 percent increase in operating costs for the Refining and Marketing segment.
Outlook
``Unusually high inventory levels caused July refining margins to fall below the average second quarter 2001 level,'' stated Smith. ``However, recently there have been improvements in the market. If this trend continues, and provided that we operate our refining system at about the same level as the second quarter of 2001, we expect third-quarter earnings per share to be in the range of $0.10 to $0.25.
``The integration of the two business units that we are purchasing from BP is proceeding very smoothly and, since we expect the regulatory review to be completed promptly, we could close by the end of the third quarter or early in the fourth quarter. Based on their consistent historical profitability, we expect that, after acquisition, these operations will be immediately accretive.
``Given our actual results for the first half of 2001 and the projected lower margin environment, we expect earnings per share to be in the range of $1.50 to $1.75 for the current year, excluding the impact of the BP operations that we are acquiring,'' concluded Smith. |
