By Kristin Jones
Tesoro Corp.'s (TSO) third-quarter profit fell 21% as the
independent refiner reported debt-related charges and higher
operating expenses, masking revenue growth.
Tesoro markets and refines petroleum, operating seven refineries
in the western U.S. and around 1,390 branded retail stations. In
August, the company agreed to buy BP PLC's (BP.LN, BP) southern
California refining and marketing business in a roughly $2.48
billion deal. Moody's Investors Service responded by lowering its
outlook on the company, pointing to financing risks associated with
the deal.
Also in the latest quarter, the company sold its Long Beach,
Calif. marine terminal and Los Angeles short-haul pipelines to
Tesoro Logistics LP (TLLP) for $210 million, marking its second
asset sale into the partnership.
Tesoro posted a profit of $273 million, or $1.92 a share, down
from $345 million, or $2.39 a share. Excluding items like a
12-cent-per-share debt redemption charge and a penny-per-share loss
related to the liquidation of the company's balance with MF Global
Holdings Ltd. (MFGLQ), per-share earnings fell to $2.05 from
$2.39.
Revenue increased 8.3% to $8.78 billion.
Analysts polled by Thomson Reuters most recently predicted
per-earnings of $2.33 a share and $8.51 billion in revenue.
Gross margin narrowed to 13.3% from 13.8%, as input costs
increased. Operating expenses were up 10%.
Gross refining margin rose to $18.32 a barrel from $18.43. Total
refining throughput increased to 626,000 barrels a day, from
609,000 barrels a day a year earlier.
Retail fuel sales rose 18%, thanks to the addition of retail
stations from Thrifty Oil Co. and Albertson's Fuel Express acquired
earlier this year.
Shares closed Wednesday at $37.71 and were inactive after hours.
The stock is up 61% so far this year.
Write to Kristin Jones at kristin.jones@dowjones.com
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