PHILADELPHIA -- Sunoco Inc. has reported net income of $287 million ($2.12 per share diluted) for fourth-quarter 2005 versus $178 million ($1.24 per share diluted) for fourth-quarter 2004. Excluding a special item, income for the current quarter was $297 million ($2.19 per share diluted). There were no special items in fourth-quarter 2004.
For full-year 2005, Sunoco reported net income of $974 million ($7.08 per share diluted) versus net income of $605 million ($4.04 per share diluted) for full-year 2004. Excluding special items, Sunoco's income was $1,012 [image-nocss] million ($7.36 per share diluted) versus $629 million ($4.20 per share diluted) for the comparable 2004 period.
All per-share amounts reflect the two-for-one stock split effected on Aug. 1, 2005.
Strong fourth-quarter results completed an outstanding year for Sunoco, said John G. Drosdick, Sunoco chairman and CEO. In a very strong refining environment, we achieved best-ever operating and safety performance in 2005. We had record operating earnings of over $1 billion and a return on capital employed of over 32%. We increased our dividend by 33%, reduced our shares outstanding by 4% and significantly strengthened our balance sheet. Our share price increased 92% for the year.
He added, Refining & Supply results continued to lead the way, with earnings of $286 million in the quarter. Refining conditions were strong throughout most of the quarter, although margins did moderate some as refineries impacted by hurricanes Katrina and Rita returned to operations over the quarter. Operationally, we had our best quarter ever, with crude unit utilization at 99% and overall system (UEDC) utilization rates of almost 91%. Retail Marketing earned $25 million, its best quarter of 2005, as retail gasoline margins benefited from crude oil and wholesale gasoline prices that were on a declining trend over much of the quarter.
Drosdick concluded, Despite some recent downward pressure on refining margins caused by the unseasonably warm weather in the Northeast, we believe the longer-term market fundamentals are still very good for our refining business.
Refining & Supply earned $286 million in the current quarter versus $135 million in fourth-quarter 2004. The increase in earnings was due to higher realized margins and higher production volumes. The higher realized margins were, in part, due to continued fourth-quarter impacts from the Gulf Coast hurricanes. Value-added product margins, particularly for premium gasoline, jet fuel and low-sulfur diesel fuel were also strong during the quarter. Partially offsetting these factors were higher expenses, including fuel and employee-related charges.
Total crude unit throughput averaged 892.6 thousand barrels daily (99% utilization) for the quarter, with total production available for sale approximating 87 million barrels.
Retail Marketing earned $25 million in fourth-quarter 2005 versus $30 million in fourth-quarter 2004. The decrease in results was due to lower gains from asset divestments associated with the Retail Portfolio Management program. Lower retail gasoline margins (down 1 cent per gallon) and sales volumes (down 2.6%) were essentially offset by lower expenses and higher margins on distillate products.
Sunoco had net income of $974 million for full-year 2005 versus $605 million for full-year 2004. The increase was primarily due to higher margins in Sunoco's Refining & Supply business. Also contributing to the improvement in earnings were higher margins from Sunoco's Chemicals business, higher production of refined products, increased use of high-acid discounted crude oils and lower net financing expenses. Partially offsetting these positive factors were higher expenses, primarily fuel and employee-related charges, lower margins in Retail Marketing and lower Chemicals sales volumes.
Philadelphia-based Sunoco has 900,000 barrels per day of refining capacity, about 4,800 retail sites, about 4,500 miles of crude oil and refined product owned and operated pipelines and 38 product terminals.
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