Tesoro Corporation Reports Second Quarter Results
Tesoro Corporation (NYSE:TSO) today reported second quarter 2010 net earnings of $67 million, or $0.47 per diluted share compared to a net loss of $45 million, or $0.33 per diluted share for the second quarter of 2009. The 2010 results include one-time net after-tax benefits of $24 million primarily related to changes to our post-retirement benefits programs. The total after-tax impact for the one-time net benefits in the quarter is $0.17 per diluted share.
Second quarter segment operating income was $153 million excluding the special items, compared to $11 million in the second quarter a year ago. The increase in operating income was driven in large part by stronger distillate margins and improved realizations in our marketing channels. These benefits were partially offset by decreased gasoline margins and reduced throughput. The reduction in throughput was primarily a result of the idled Anacortes refinery and the planned full plant turnaround at our Mandan refinery.
For the second quarter, the Tesoro Index was over $1.40 per barrel higher than a year ago, as a result of improved West Coast benchmark diesel margins, which were up 55%. Gasoline margins however fell by 15% versus a year ago. Tesoro benefited from blending ethanol into gasoline as ethanol prices traded on average $0.55 per gallon below California grade gasoline. The second quarter results also reflect improved performance in both our wholesale and retail marketing channels, as spot prices for gasoline and diesel fell more rapidly than wholesale rack or retail street prices during the period.
“We are pleased with our second quarter results, despite the lost opportunity due to the idling of our Anacortes refinery and the full plant turnaround at our Mandan refinery,” said Greg Goff, President and CEO of Tesoro. “During the quarter we saw improvements in several key economic indicators, including West Coast port and rail activity. We believe these trends drove diesel margins higher. These increases are not, however, being seen in gasoline margins. While gasoline demand has stabilized, high unemployment in California continues to keep demand low.”
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