You are here
SAN ANTONIO — Tesoro Corp. reported a banner 2014 fiscal third quarter in all segments of its retail division, led primarily by robust earnings at its ARCO ampm convenience stores.
San Antonio-based Tesoro’s retail division earned a record net profit of $138 million during the quarter ended Sept. 30, a 146-percent increase compared to the $56 million it earned in the same period in 2013.
Favorable market conditions, most notably lower fuel prices, were a boon to Tesoro’s retail division, said President and CEO Greg Goff, who cited business at its California c-stores and gas stations as especially strong.
“Vehicles miles traveled in California were at an all-time high [during the quarter],” he stated during Friday’s third-quarter earnings call.
In addition, the company pointed to its expanding Exxon and Mobil retail branding program as another reason Tesoro achieved record retail earnings.
Fuel gross margins and margin per gallon were especially solid in Tesoro’s most recent quarter. Fuel gross margins rose $91 million to $214 million. Fuel margins per gallon increased a strong 8 cents per gallon to 20 cents per gallon.
Total fuel sales in terms of dollars also increased, but to a lesser extent. Total fuel sales reached $1.075 billion, vs. $1.04 billion in the same period in 2013. Same-store fuel sales jumped 1.4 percent.
More drivers on the road led to an increase in in-store merchandise sales, too. Merchandise gross margins reached $33 million, a year-over-year increase of $2 million.
As of Sept. 30, Tesoro had 586 company-operated convenience stores and gas stations, along with 1,693 branded jobber/dealer locations. These 2,279 sites operate under the ARCO, Shell, Exxon, Mobil, USA Gasoline and Tesoro brand names.
Companywide, Tesoro’s earning were strong as well. The company earned a net profit of $396 million, quadruple the $99 million it earned in 2013’s third quarter.
"We continue to execute on our strategic priorities and business improvement actions," said Goff. “In addition, our focus on operational efficiency and effectiveness resulted in strong operating performance across our integrated value chain. As a result of this progress and strong commercial results in a favorable market, we delivered the highest quarterly EBITDA in company history.”