Sunoco Inc. earned $123 million in the fourth quarter, compared with $287 million a year earlier, when hurricane damage on the Gulf Coast temporarily knocked out a big chunk of the nation's refining capacity.
Ample supplies of gasoline and other refined products in the last three months of 2006, coupled with a warm start to the winter, helped reduce Sunoco's benchmark profit margin to $3.68 a barrel of oil from $9.23 in 2005, the company said yesterday.
Fourth-quarter net income per share was $1 in 2006, compared with $2.12 a year earlier. Revenue fell to $9.04 billion from $9.27 billion, as the company's five refineries processed less crude oil because of maintenance downtime.
Sunoco - the largest refiner in the Northeast, with three refineries in the Philadelphia area - ran at 90 percent of capacity in the last three months of 2006, compared with 99 percent of capacity in 2005, when refiners that escaped hurricane damage went all out to make up for lost supplies. Its other refineries are in Toledo, Ohio, and Tulsa, Okla.
Despite the dip in profitability in the fourth quarter, "2006 was another strong year for Sunoco," John G. Drosdick, the company's chairman and chief executive officer said in a news release after the market closed.
Sunoco's shares closed yesterday at $63.13, up 11 cents.
Drosdick said Sunoco's full-year 2006 earnings of $7.59 a share were the highest ever. In 2005, Sunoco earned $7.08 a share.
Sunoco's retail operations lost $11 million in the fourth quarter, mostly because of lower profit margins and a $6 million after-tax charge for environmental litigation. In 2005, those operations earned $25 million.
A $500 million expansion and upgrade at the Philadelphia refinery - $100 million more than previously expected - is on track for completion in the first half of this year, Sunoco said. The integration of that equipment will reduce production about eight million barrels over the next two months.
For Sunoco's full fourth-quarter financial report, go to http://go.philly.com/sunocoQ4