The Philadelphia refining and marketing company, which announced plans last month to idle its Eagle Point refinery in New Jersey, told employees this week that it would freeze pensions and post-retirement medical benefits after July 1, 2010, to cut costs.
"We continue to expect a challenging market for petroleum and chemical products due to ongoing economic weakness and additional global supply," said Lynn L. Elsenhans, Sunoco's chief executive officer.
Sunoco's quarterly loss amounted to $2.67 a share, compared with a profit of $549 million, or $4.70 a share, for the third quarter of 2008.
The company recorded a onetime $278 million after-tax charge related the closure of the Gloucester County refinery, which ceased operations this week. Sunoco is shifting its refining operations to its Philadelphia and Marcus Hook plants.
The weakness in the fuel market was reflected in a half-billion-dollar swing in Sunoco's refining and supply unit. It reported an operating loss of $118 million, compared with a profit of $398 million in the third quarter of 2008, when pump prices soared.
Excluding special items, Sunoco had a loss of $34 million, or 29 cents a share, compared with income of $559 million, or $4.78 a share, a year earlier.
Elsenhans said Sunoco's coke, retail-marketing, and logistics units were profitable.
By freezing its defined-benefit pension plan and cutting post-retirement medical benefits, Sunoco joins a growing number of employers who have cut benefits.
The company will enhance its 401(k) program to help offset the change in pension benefits, said spokesman Thomas P. Golembeski. He said Sunoco also gave eight months' notice to allow its employees time for financial planning and "individual decisions regarding retirement."
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