Western Refining Net Income Improves
Retail segment operating income down, but net sales up
EL PASO, Texas -- Western Refining Inc. has reported net income for the third quarter ended September 30, 2011, of $84.9 million, 81 cents per diluted share. Net income improved significantly compared to third-quarter 2010 net income of $6.9 million. This increase was due primarily to significantly higher refining gross margins.
Jeff Stevens, Western's president and CEO, said, "Western had another successful quarter due primarily to the strong refining margins and the strength of our operations."
The company's retail segment reported operating income of $2.5 million for third-quarter 2011, compared to $7.6 million for third-quarter 2010. Net sales for third-quarter 2011 of $258 million were up from $195.1 million in third-quarter 2010.
The retail outlets sold 62.2 million gallons of fuel in third-quarter 2011, compare to 56.6 million in third-quarter 2010. Fuel margin per gallon was 18 cents i n the 2011 period, versus 22 cents in the 2010 period.
It reported merchandise sales of $55.5 million in third-quarter 2011, versus $52. 4 million in third-quarter 2010. Merchandise margin was 27.9% in the current quarter, compared to 28.8% a year ago.
The company said it had 172 retail outlets for the 2011 period, versus 150 in the year-ago period.
During the company's third-quarter conference call, CFO Gary Dalke said, "In our retail business fuel volumes and merchandise sales increased due to the new locations that we added in Tucson in the second quarter. These sales gains were offset by slightly lower fuel and merchandise margins compared to Q3, 2010."
He added, "During October, we added 34 retail sites through a long-term lease arrangement. Most of these new locations were added in and around El Paso. These outlets will be a good addition to our retail group and will provide an integrated demand outlet for our existing Southwest refining in logistic assets. With these recent additions we currently have 206 retail locations."
An independent refining and marketing company, Western Refining operates refineries in El Paso, and in Gallup, N.M.; refined products terminals in Albuquerque and Bloomfield, N.M., and Yorktown, Va.; and a fleet of crude oil and finished product truck transports and wholesale petroleum products operations in Arizona, California, Colorado, Nevada, New Mexico, Texas and Utah.
Western Refining Southwest Inc., its retail division, owns and operates convenience stores and gas stations located in New Mexico, Arizona and Colorado. The company markets under its own brands of Giant, Mustang and Sundial. A number of locations feature the brands of other oil companies and license Western branded fuel to other retail stores.