Sunoco Inc. reported a net loss of $55 million, or $0.47 per share diluted, for the second quarter of 2009 vs. net income of $82 million, or $0.70 per share diluted, for the second quarter of 2008. Excluding special items, Sunoco had a loss for the 2009 second quarter of $31 million, or $0.27 per share diluted, vs. 2008 second quarter income of $61 million, or $0.52 per share diluted.
For the first half of 2009, Sunoco [image-nocss] reported a net loss of $43 million, or $0.37 per share diluted, vs. net income of $23 million, or $0.20 per share diluted, for the first half of 2008. Excluding special items, Sunoco had income of $28 million, or $0.24 per share diluted, in the first half of 2009 vs. 2008 first half income of $2 million, or $0.02 per share diluted.
"During the second quarter, refining and chemicals results were impacted by weak demand and rising crude prices, but our other businesses continued to generate steady earnings," said Lynn Elsenhans, Sunoco's chairman and CEO. "Our refining operating results were also negatively affected by a $14 million after-tax charge associated with the permanent shutdown of the ethylene complex at our Marcus Hook refinery. This decision was made after a fire impacted the operations, and it was determined that the demand for those products did not justify repairing or replacing equipment damaged in the fire."
She added, "The earnings contribution from our non-refining businesses improved to $78 million in the second quarter, up from $47 million in the prior-year period. Retail marketing modestly improved from the prior year although weak demand and rising feedstock costs continued to limit its contributions. Logistics earned $26 million with strong results from Sunoco Logistics Partners L.P. and our Coke segment earned $42 million."
Commenting on the company's outlook, Elsenhans said, "We continue to expect a challenging market for petroleum and chemical products due to ongoing economic weakness and additional global supply. However, the company remains focused on executing our strategic plan by improving our competitive cost position and optimizing our portfolio and operational performance."
RETAIL MARKETING
Retail Marketing earned $10 million in the current quarter vs. break-even results in the second quarter of 2008. The increase in earnings was primarily due to lower expenses, partially offset by lower-than-average retail gasoline margins. Sales volumes were relatively flat vs. the year-ago quarter, but retail gasoline margins were negatively affected by rising wholesale prices and a weak demand environment.
REFINING AND SUPPLY
Refining and Supply had a loss from continuing operations totaling $77 million in the current quarter vs. income of $27 million in the second quarter of 2008. The decrease in results was due to lower realized margins, a $14 million after-tax write-off of certain assets in connection with the shutdown of the ethylene complex at the Marcus Hook refinery and lower production volumes, partially offset by lower expenses.
The company's realized margins and crude utilization rate were negatively affected by market weakness and rising crude prices during the quarter. The overall crude utilization rate was 78% for the quarter.
Discontinued Tulsa refining operations had a loss of $6 million in the second quarter of 2009 vs. income of $5 million in the second quarter of 2008. The decline in operating results was primarily attributable to lower realized margins and production volumes, partially offset by lower expenses. The second quarter of 2009 reflects only two months of production as the Tulsa refinery was sold on June 1, 2009.
Sunoco Inc., Philadelphia, is a manufacturer and marketer of petroleum and petrochemical products. With 825 thousand barrels per day of refining capacity, approximately 4,700 retail sites selling gasoline and convenience items, approximately 6,000 miles of crude oil and refined product owned and operated pipelines and 43 product terminals, Sunoco is one of the largest independent refiner-marketers in the United States.
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