“Market conditions continue to pose challenges for our refining and supply segment and, while the refineries’ operational performance improved during the third quarter with crude utilization averaging 90%, the segment reported another loss,” says Sunoco CEO.
Sunoco Inc. has reported a net loss attributable to Sunoco shareholders of $1,096 million ($9.62 per share diluted) for the third quarter of 2011 versus net income attributable to Sunoco shareholders of $65 million ($0.54 per share diluted) for the third quarter of 2010.
Third quarter results included a previously disclosed noncash provision of $1,959 million ($1,175 million after tax) to write down refining assets to their estimated fair values in connection with Sunoco’s decision to exit the refining business. Excluding special items, Sunoco had income of $65 million ($0.57 per share diluted) for the third quarter of 2011 versus income of $27 million ($0.22 per share diluted) for the third quarter of 2010.
Key third quarter details include:
• Retail and Logistics contributed pretax income of $101 million
• Refining and Supply reported a pretax loss of $17 million
• Logistics completed acquisitions totaling $295 million during the third quarter
• Completed the exit from the Chemicals business with the closing of the sale of the Haverhill facility in late October
“A second straight quarter of record earnings at Sunoco Logistics Partners L.P. and good results in retail were the primary drivers of Sunoco’s profitability from operations in the third quarter. These segments contributed $53 million and $48 million in pretax income, respectively,” said Lynn Elsenhans, Sunoco’s chairman and CEO. “Market conditions continue to pose challenges for our refining and supply segment and, while the refineries’ operational performance improved during the third quarter with crude utilization averaging 90%, the segment reported another loss. We remain focused on running our assets safely and reliably at economic utilization rates.”
“Creating value for shareholders and positioning Sunoco for future success continue to be top priorities,” Elsenhans said. “We recently completed the previously announced $500 million share repurchase at an average price of $34.69 per share, and successfully completed the initial public offering of SunCoke Energy. We also continue to make progress on our strategic review of the company with a focus on exiting the refining business, determining the optimal allocation of our capital resources and maximizing the potential for our retail and logistics businesses.”
Refining and Supply
Refining and Supply had a pretax loss of $17 million in the current quarter versus $70 million in the third quarter of 2010. The $53 million improvement in results was primarily due to higher realized margins and lower expenses. Partially offsetting these positive factors were lower production volumes. The overall crude utilization rate was 90% for the quarter, up from 84% in the second quarter of 2011.
Retail Marketing earned $48 million pretax in the current quarter versus $68 million in the third quarter of 2010. The decrease in earnings was largely attributable to higher expenses resulting primarily from litigation charges and higher credit card fees. Lower gains on asset sales also contributed to the decline.