Net income falls for Tesoro Corp.
Tesoro Corp., which operates the larger of Hawaii's two oil refineries, said yesterday that net income fell 99.1 percent in the second quarter as record crude oil prices pressured its profit margins.
Net income plunged to $4 million, or 3 cents a share, from $443 million, or $317 a share, a year earlier.
Revenue rose 56.2 percent to $8.75 billion from $5.6 billion.
Tesoro's refining margin at its Campbell Industrial Park facility swung to a negative $6.33 a barrel versus a gain of $6.78 a barrel a year ago. The refining margin is the spread between the cost of crude oil and price of refined products.
The local facility's yield, or the total number of barrels of refined products of gas, jet fuel, diesel fuel and heavy oils, fell to 73,000 barrels a day from 88,000 barrels a day. The total throughput in Hawaii declined to 71,000 from 87,000 barrels a day.
Tesoro said the refining sector continues to be impacted by higher crude and energy costs, and lower demand compared to a year ago. Crude prices were up almost $60 per barrel in the quarter, compared to 2007, while preliminary industry data suggests that demand in California is down approximately 5 percent to 6%. As a result of these factors, the benchmark West Coast margin was down almost 40 percent in the quarter versus a year ago.