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SANFORD, N.C. -- With the release of its second quarter results today, The Pantry Inc. reported revenue for the quarter of approximately $2.5 billion, an increase of roughly 20 percent from this period last year.
"The macro economic environment we're facing from a perspective of overall weakness, consumer spending and gas cost installation is the toughest I've seen in the last 10 years," Chairman and Chief Executive Officer Peter J. Sodini said during a conference call with investors. "We have managed through this very challenging past period."
Sodini explained net income was $10.7 million, compared with $12.6 million, in last year's third quarter.
Total merchandise gross profit was down 0.7 percent to $156.6 million.
While retail gas revenues increased by 26.4 percent, retail gasoline gallons sold in the quarter were down 2.5 percent. Sodini noted the retail gross margin per gallon was 10.7 cents, compared with 12.8 cents a year ago.
To date, The Pantry has ethanol inline or splash-blended at 1,300 of it stores; however, Sodini said "due to competitive sensitivities regarding this segment we decided we no longer, no further will discuss any additional details regarding the economics of ethanol."
With regards to future plans, Sodini said, "no additional acquisitions will take place during this calendar year. We believe the time will come to strategically look at acquisitions again."
In related earnings news, despite realizing a 14 percent earnings increase, which broke its own record, Exxon Mobil Corp. profits didn't meet analysts' predictions; however, it did record the highest ever-profit for a U.S. company.
Reuters reported the world's largest publicly traded company's net income in the quarter rose to $11.68 billion, from $10.26 billion last year. Revenue in the quarter rose about 40 percent to $138.07 billion.
Exxon reported its exploration and production business increased by roughly 68 percent to $10.01 billion, while refining and marketing earnings fell by approximately 54 percent to $1.56 billion.
In other earnings news, Tesoro Corp. released its second quarter report, which noted net earnings of $4 million and net income for the second quarter of 2007 was $443 million.
In comparison to last year, lower gross refining margins and higher operating costs were met with reduced refining throughput, the company reported. For example, total fuel oil production for the quarter was 60 thousand barrels per day compared to last year’s average of 53 thousand.
"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 to 6 percent," Bruce Smith, Tesoro chairman, president and CEO, said in a statement. "As a result of these factors, the benchmark West Coast margin was down almost 40 percent in the quarter vs. a year ago."
He continued: "Our opportunities in this type of environment lie in identifying and executing self-help initiatives such as effectively matching production and
inventory levels to consumer demand, optimizing product mix towards more profitable diesel fuel and less discounted fuel oil, and reducing expenses."