Marathon Oil Corp. reported second quarter 2009 net income of $413 million, or $0.58 per diluted share. Net income in the second quarter 2008 was $774 million, or $1.08 per diluted share. For the second quarter 2009, adjusted net income was $251 million, or $0.35 per diluted share, compared to adjusted net income [image-nocss] of $858 million, or $1.20 per diluted share, for the second quarter of 2008.
"Marathon's businesses performed very well in the second quarter. Our exploration and production segment achieved a 12% year-over-year increase in production available for sale from continuing operations while our refining, marketing and transportation segment out-performed its competitors in the domestic market posting positive financial results, up slightly from both first quarter and prior year," said Clarence P. Cazalot Jr., president and CEO of Marathon, Houston. "A continued focus on high mechanical reliability and cost control contributed to our overall solid operating performance. And, in spite of challenging global economic conditions, Marathon continues to maintain a very solid financial position, aided by the value captured from selective asset sales."
Income in the refining, marketing and transportation segment was $165 million in the second quarter of 2009, compared to $158 million in the second quarter of 2008.
The second quarter 2009 refining and wholesale marketing gross margin of 8.71 cents per gallon increased slightly from 8.35 cents in the second quarter of 2008. The gross-margin increase was primarily due to improved crack spreads as reflected in the relevant market indicators in the Midwest (Chicago) and Gulf Coast and lower manufacturing expenses in the second quarter 2009 compared to the same quarter last year.
The lower manufacturing expenses resulted primarily from lower energy costs. However, these favorable impacts were largely offset by a relatively higher cost of crude oil, primarily driven by a substantially narrower sweet-sour differential, and other feedstock costs compared to the average prices reflected in the market indicators.
Marathon's second quarter 2009 refining and wholesale marketing gross margin included pretax derivative gains of $13 million, primarily resulting from management of crude-oil inventory price risk exposure. The second quarter 2008 gross margin included pretax derivative losses of $187 million, including the impact of using derivatives to mitigate domestic crude oil acquisition price risk, a practice that the company discontinued during that quarter.
Crude oil refined during the second quarter of 2009 averaged 959,000 bpd, a 64,000 bpd decrease from the second quarter of 2008, and total refinery throughputs were 1,158,000 bpd, approximately 4% lower than the 1,203,000 bpd in the second quarter of 2008.
Speedway SuperAmerica LLC (SSA) gasoline and distillate gross margin per gallon averaged 10.51 cents in the second quarter of 2009, compared to 8.62 cents in the second quarter of 2008.
SSA second quarter 2009 same-store gasoline sales volume increased by approximately 3% over the second quarter of 2008vs. an estimated demand decline of about 2% in the company's market area in the second quarter 2009while same-store merchandise sales increased by approximately 14% for the same period.
Click hereto see Marathon's complete quarterly earnings report.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.