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PHILADELPHIA -- Major oil company Sunoco Inc. suffered a net loss of $9 million during the fourth quarter of fiscal 2007, which was attributed to gas prices failing to keep pace with record prices for crude oil, Reuters reported. Excluding special items, the company saw income of $23 million for the fourth quarter of 2007, according to the company's financial statement.
The net loss was a deep drop from the year-earlier net income of $123 million, according to the report.
Revenue for the fourth quarter rose to $13.16 billion from $9.04 billion in 2006, Reuters reported.
"Despite significant market volatility, 2007 was another very good year for Sunoco, with earnings reflecting, on average, strong refining margins and a positive contribution from each of our nonrefining businesses," John G. Drosdick, chairman and CEO for Sunoco, said in a statement. "Fourth quarter financial performance was negatively impacted by the sharp increase in crude oil prices which occurred throughout the period."
As a result, the company saw lower refining, retail and chemicals margins, he said. The company also achieved strong operating performance in its refining division, where it set a quarterly record for total net production available for sale of 962,000 barrels per day.
The company's retail marketing segment earned $1 million in the fourth quarter of 2007, a jump from the loss of $11 million in the comparable quarter. The increase in earnings was due to higher average retail gasoline margins and lower expenses, the company stated.
Within the division, monthly gasoline and diesel throughput per company-owned or leased outlet increased approximately 2 percent, while convenience store merchandise sales were up approximately 6 percent, according to the company.
Looking forward into the first quarter of 2008, Drosdick noted the market for refined products remains weak, a reflection of continued high costs for crude oil and transportation.
However, he added that as industry maintenance activity accelerates and the switchover to summer-grade gasoline approaches, the company expects market conditions to improve later in the quarter.
"Strategically, we enter 2008 with a strong balance sheet and the financial capacity to execute our capital program, pursue opportunistic growth and return cash to our shareholders," said Drosdick. "Although volatile, we believe that the market outlook for refining fundamentals remains constructive and that the improvements made to our refining assets last year will benefit us in 2008. In addition, we expect our nonrefining businesses to provide a steady base of earnings and cash flow while we continue to evaluate portfolio options to maximize their long-term value to our shareholders."