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FINDLAY, Ohio -- The highlight of Marathon Petroleum Corp.'s latest quarter was its successful spinoff of MPLX LP, a new master limited partnership that owns, operates, develops and acquires crude oil, refined products and other hydrocarbon-based product pipelines and other assets.
The MPLX initial public offering (IPO) netted $438 million in proceeds, $203 million of which has gone directly to Marathon Petroleum. "We believe the MPLX IPO will unlock shareholder value," Gary Heminger, Marathon Petroleum's president and CEO, said during the company's third-quarter earnings call today.
Heminger also announced that Garry Peiffer, who has served as Marathon Petroleum's executive vice president of corporate planning and investor and government relations, has been named president of MPLX.
Meanwhile, in the company's convenience store division, Speedway LLC, net income declined in the third quarter, compared to the same period last year. Speedway earned $76 million in its 2012 Q3, compared to an $85-million profit during the same quarter last year. Speedway attributed the $9-million profit decline to lower gasoline and distillates gross margins, as well as higher expenses.
Speedway also suffered a small loss in same-store merchandise sales, which declined by 0.8 percent in the quarter ended Sept. 30 vs. the third quarter of last year. Same-store gasoline sales volume decreased by 3.9 percent in the convenience store chain's latest quarter.
The company said high gasoline prices caused its same-store gasoline volume to drop. "We often see gasoline demand decline above $3.50 per [regular] gallon," Heminger explained. "In October, we've seen demand increase as prices have averaged less than $3.50 per gallon."
Speedway operated 1,463 convenience stores as of Sept. 30, compared to 1,374 stores a year ago.
Regarding Marathon Petroleum's overall earnings, the company achieved a small profit increase. It earned $1.22 billion during its latest quarter, compared to $1.13 billion in its 2011 third quarter. Revenues rose to $21.25 billion vs. $20.65 billion in the company's 2011 fiscal Q3.
Before making his remarks on today's earnings call, Heminger took a moment to give a heartfelt welcome to those listening who were affected by Hurricane Sandy. "We are thinking of everyone in the Northeast," he said.