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PHILADELPHIA--Sunoco Inc. reported net income of $79 million ($.59 per share diluted) for the first quarter of 2006 versus $116 million ($.83 per share diluted) for the first quarter of 2005.
"First-quarter earnings were impacted by a high level of refinery maintenance and rising crude oil prices during the quarter," said John G. Drosdick, Sunoco chairman and chief executive officer. "High beginning-of-the- year refined product inventories and unseasonably warm winter weather in the northeastern United States negatively impacted refining margins while rising crude oil prices squeezed retail gasoline and chemical margins during the quarter."
Retail marketing posted break-even results in the first quarter of 2006 versus an $8 million loss in the first quarter of 2005. While retail gasoline margins were poor during most of the current quarter, they were slightly higher than the year-ago period. Monthly gasoline and diesel throughput per company owned or leased outlet was approximately the same versus the first quarter of 2005.
"Utilization at our refining facilities was limited to 93 percent for the quarter due to maintenance ahead of this year's driving season,” Drosdick reported. “We recently completed a turnaround at our Toledo refinery and are now positioned to run at capacity levels during the peak summer demand months.”
He also noted that the company was near completion of the necessary capital investments to ready the refining system for the upcoming diesel fuel specification changes. The current roll-out of ethanol-blended gasoline and the transition to ultra-low- sulfur diesel fuel present significant manufacturing and logistical challenges for the industry.
"We will continue to invest significant capital in our refining facilities,” Drosdick said. “We have spent approximately $700 million to comply with the new low-sulfur gasoline and on-road diesel requirements. Looking ahead, over the next three years, we plan to spend approximately $2 billion to increase production and further improve and maintain our refining system."