Tesoro reports disappointing first quarter earnings

Tom Hall

Citing “one of the most volatile” first quarters ever “in regard to West Coast refined product margins,” Tesoro Petroleum Corp. announced on April 29 net earnings of $.3 million for the first quarter of 1999. After preferred stock dividends, the result was a net loss of eight cents per share.

The company said that the first two months of the quarter were particularly bad, especially on the West Coast where “severe weather conditions and seasonally low product demand” caused low throughput and tight profit margins.

“In January and February, we took a pretty severe impact due to Cook Inlet being iced over,” said Tesoro Alaska Petroleum Co. president Steve Ricks.

Bruce Smith, president and CEO of Tesoro Petroleum Corp. (Tesoro Alaska’s parent company) believes the rest of 1999 will be much better for the company. “We are pleased with our operational performance in the first quarter, and are optimistic for the remainder of 1999, given continued improvements in industry fundamentals,” he said.

Ricks echoed that belief when he told PNA, “We look to be back on plan for the rest of the year.” Performing a ‘turnaround’ on the refinery is part of that plan. Ricks explained that a turnaround is a one to three week shutdown of the refinery to do preventive maintenance. During that period, the company will also install the last of hardware and software to make the plant Y2K compliant.