Western Refining, Inc. (NYSE:WNR) today reported a net loss of $30.7 million, or $0.35 per diluted share, for the first quarter ended March 31, 2010, versus the first quarter 2009 reported net earnings of $58.9 million, or $0.86 per diluted share. Excluding special items, net income was $51.7 million, or $0.76 per diluted share, for the first quarter in 2009. A reconciliation of net income (loss) to net income (loss) excluding special items, for all periods shown, is included in the accompanying financial tables.
The year-over-year decline in net income was primarily due to lower refined product margins driven by weakness in finished product prices relative to crude and feedstock costs. A major turnaround at the El Paso refinery and planned maintenance at the Gallup refinery also impacted net income for the quarter.
In 2009, Western announced that it would consolidate the operations of its two Four Corners refineries into the Gallup refinery resulting in a $25 million annual reduction in operating expenses. The Company also identified approximately $25 million in additional cost reduction initiatives. Through the first quarter of 2010, Western is ahead of schedule in realizing its 2010 cost reduction goal of $50 million and continues to pursue additional savings opportunities.
Jeff Stevens, Western’s President and CEO, commented on the quarter, “We saw improvement in refining margins throughout the quarter, especially when compared to the extremely low margin environment of last October and November. During the quarter, we also continued to see a positive impact on earnings from our cost savings initiatives.”
Stevens continued, “We are pleased to have successfully completed the planned 19 day turnaround at our El Paso refinery and a 10 day catalyst regeneration at our Gallup refinery, both of which have resulted in improvements to our refining operations. Both facilities are operating at increased rates and yields as a result of this maintenance.”