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    Susser, Marathon, Tesoro, CHS Report Results

    Performance a mixed bag for c-store/petroleum companies.

    CORPUS CHRISTI, Texas -- Susser Holdings Corp. reported healthy same-store merchandise and gasoline sales for the quarter and expects modest growth for 2009.

    The operator of more than 510 Stripes and Town & Country stores saw same-store merchandise sales growth for the fourth quarter of 2008 of approximately 6.5 percent on a reported basis and 7.3 percent on a pro-forma basis. Retail average for fuel sales volumes on a per-store basis are expected to be up 6.2 percent on a reported basis and up 4.8 percent on a pro-forma basis.

    Pro-forma comparisons reflect the combined results of Stripes and Town & Country stores as if Susser had acquired Town & Country Food Stores at the beginning of 2007. Susser completed its acquisition of Town & Country on Nov. 13, 2007.

    For the full year 2008, Susser expects to report an increase in same-store merchandise sales of approximately 6.6 percent on a reported basis and 7.8 percent on a pro-forma basis, slightly higher than the top end of the company's 2008 guidance for reported same-store sales growth of 5 percent to 6.5 percent. Retail average per-store fuel volumes are expected to be up by 2.6 percent on a reported basis and up 0.1 percent on a pro-forma basis, in line with the company's guidance of 0 to 3 percent.

    During 2008, Susser opened 12 retail stores and closed four, bringing its retail store count to 512.

    For 2009, the company expects merchandise same-store sales growth of 3 to 5.5 percent; merchandise margin (net of shortage) of 33.5 to 35 percent and retail average per-store gallons growth of 0 to 3 percent.

    Retail fuel margins are expected to be 12.5 to 16.5 cents per gallon. Wholesale fuel margins are estimated at 4.5 to 6 cents per gallon.

    The chain expects to open eight to 16 new stores and 25 to 35 new wholesale dealer sites. Gross capital spending will be in the $50 million-$90 million range.

    Meanwhile, Houston-based Marathon Oil Corp.'s refining and wholesale gross margin is down significantly, but Speedway SuperAmerica's same-store gas sales are expected to be on par with last year's performance, according to a sneak peek of the oil company's businesses released ahead of its quarterly report.

    Marathon, which will report full fourth-quarter results Feb. 3, estimated its fourth-quarter 2008 refining and wholesale marketing gross margin will be approximately 12 cents per gallon as compared to 48 cents per gallon in the fourth quarter 2007. Marathon's ethanol blending margins are also projected to be less favorable in the fourth quarter 2008 vs. fourth quarter 2007, primarily due to a narrowing in the differential between gasoline and ethanol prices.

    Speedway SuperAmerica LLC's gasoline and distillate gross margin averaged 20.44 cents per gallon during October and November 2008 and is expected to average approximately 18 cents per gallon for the entire fourth quarter. SSA same-store gasoline sales volume for the first two months of the fourth quarter 2008 decreased slightly compared to the first two months of the fourth quarter 2007. However, the company projects that SSA's same-store gasoline sales volume for the entire quarter will be slightly better than the same quarter last year.

    At San Antonio-based Tesoro Corp., the independent refiner/marketer expected earnings in the fourth quarter to be positively impacted by better a widening of margins beginning around mid-December, which occurred as unplanned refinery maintenance on the West Coast led to historically low inventory of gasoline supply, and better marketing and retail margins.

    For the fourth quarter 2008, the company gross margin, excluding significant one-time adjustments, will be approximately $12 to $12.50 per barrel. Retail margins in the fourth quarter 2008 were consistent with those realized in the third quarter 2008.

    Tesoro will release earnings for the fourth quarter and full year 2008 on Feb. 19, 2009.

    Tesoro operates seven refineries in the western United States with a combined capacity of approximately 660,000 barrels per day. Its retail-marketing system includes more than 870 branded stations, of which more than 380 are company-operated under the Tesoro, Shell, Mirastar and USA Gasoline brands.

    Meanwhile, CHS Inc., based in St. Paul, Minn., reported first-quarter net income of $137.3 million, compared to $300.9 million for the same period of fiscal 2008.

    Operating earnings for the quarter were $232.8 million, down from $248.2 million for the same period a year ago. Still, revenues climbed to $7.7 billion, up from $6.5 billion for the first quarter of fiscal 2008, due to higher values for the grain and crop nutrient products the company handles.

    Energy sector earnings of $184.7 million, compared to $108.5 million the year before, reflected strong performance within refined fuels, along with a $15.7 million gain on the sale of CHS ownership of a seat on the New York Mercantile Exchange.

    During the first quarter of fiscal 2009, CHS also recorded a $70.7 million impairment on the value of its ownership of VeraSun Energy Corp., the ethanol manufacturer that filed for Chapter 11 bankruptcy protection in October 2008. CHS previously recorded an impairment of $71.7 million in the fourth quarter of fiscal 2008.

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