HONOLULU and SAN ANTONIO (HawaiiNewsNow) - Tesoro Corp. (NYSE: TSO) reports its profit rose sixfold over the summer on higher profit margins and higher production, including at its Hawaii refinery.
With the company's refineries collectively running at 92 percent of capacity, third quarter net was $345 million, on $8.1 billion revenue. A year ago, when several refineries including the Campbell Industrial Park facility were not always at full production due to maintenance, Tesoro made $56 million on $5.3 billion. Cost of sales was $6.98 billion, up from $4.64 billion a year earlier. The profit was the best for Tesoro since 2007.
"We are pleased with the exceptional third quarter results," CEO Greg Goff said.
Tesoro and Chevron own Hawaii's two refineries, both in Kapolei, and Tesoro said profit margin improved for its facility. Tesoro is an oil company with no oil wells, and sometimes does not share in the prosperity of its industry because of the costs of buying crude from others. In this case, however, the company said some of the foreign crude it bought was sold at a discount to U.S. benchmark prices.
The Hawaii refinery saw throughput increase from 54,000 barrels a day in third quarter 2010 to 76,000 in third quarter 2011. Jet fuel production increased to a point where it was on a par with gasoline production. Jet fuel, akin to kerosene, is a key product for both refineries in Hawaii, sold not only to commercial airlines but also to U.S. military operations in the state.
Tesoro bought or leased about 300 retail stations on the mainland during the quarter, though retail margins actually fell compared to year-before levels. The company said 47 percent of its gasoline now goes to its own retail outlets.