Tesoro Corp. (TSO, Financial) filed Quarterly Report for the period ended 2010-03-31.
Tesoro Corp. has a market cap of $1.89 billion; its shares were traded at around $13.41 with and P/S ratio of 0.1. Tesoro Corp. had an annual average earning growth of 11.8% over the past 10 years.TSO is in the portfolios of David Dreman of Dreman Value Management, Charles Brandes of Brandes Investment, George Soros of Soros Fund Management LLC, Chuck Royce of Royce& Associates, Kenneth Fisher of Fisher Asset Management, LLC.
In March 2010, seasonal demand patterns, expectations of economic recovery and events related to earthquakes in Chile led to increased product margins. West Coast gasoline margins improved over 92% throughout the 2010 first quarter as compared to the fourth quarter of 2009 due to seasonal increases in demand however, high inventories limited increases in margin. West Coast gasoline inventories increased through the quarter ending March 2010 at levels above the five year average. From January 2010 to March 2010, U.S. West Coast benchmark diesel margins increased by 53% as diesel supplies adjusted to outages of Chilean refineries. During this period, crude oil differentials increased. Crude oil differentials are the price differences between light crude oils and heavy crude oils. For example, Oriente crude (a South American heavy crude oil) traded for approximately $9.00 per barrel below WTI (a benchmark light crude oil) in March compared to approximately $5.30 per barrel in January.
Our net loss was $155 million ($1.11 per diluted share) for the three months ended March 31, 2010 (2010 Quarter), compared with net earnings of $51 million ($0.37 per diluted share) for the three months ended March 31, 2009 (2009 Quarter).
Overview. Operating income for our refining segment decreased by $346 million during the 2010 Quarter primarily due to lower gross refining margins, higher stock-based and incentive compensation costs and the impairment charge related to our Los Angeles refinery. The significantly lower gross refining margin per barrel negatively impacted total gross refining margins by $315 million during the 2010 Quarter.
Gross Refining Margins. Our gross refining margin per barrel decreased to $6.36 per barrel in the 2010 Quarter, compared to $12.14 per barrel in the 2009 Quarter reflecting significantly lower industry diesel fuel and gasoline margins. The decrease in industry diesel fuel margins reflects lower global demand and significantly higher U.S. inventories. Industry gasoline margins on the U.S. West Coast declined significantly in the 2010 Quarter as compared to the 2009 Quarter, primarily due to excess gasoline inventories.
Costs of Sales and Expenses. Our average costs of sales increased 80% to $82.82 per barrel during the 2010 Quarter reflecting significantly higher crude oil prices. Manufacturing and other operating expenses increased to $324 million in the 2010 Quarter, compared to $316 million in the 2009 Quarter, primarily reflecting the incentive compensation recorded for the refining segment. The increase in loss on asset disposals and impairments includes a $20 million impairment charge related to our Los Angeles refinery.
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Tesoro Corp. has a market cap of $1.89 billion; its shares were traded at around $13.41 with and P/S ratio of 0.1. Tesoro Corp. had an annual average earning growth of 11.8% over the past 10 years.TSO is in the portfolios of David Dreman of Dreman Value Management, Charles Brandes of Brandes Investment, George Soros of Soros Fund Management LLC, Chuck Royce of Royce& Associates, Kenneth Fisher of Fisher Asset Management, LLC.
Highlight of Business Operations:
We have identified approximately 300 high-return projects that we can implement quickly to improve our economic position and create incremental shareholder value in the current low margin environment. These projects focus on lowering our feedstock costs, improving clean product yields and reducing operating costs, which includes improving energy efficiency at all of our refineries. The majority of these projects will cost less than $1 million. We expect to spend approximately $60 million for these projects in 2010, including $5 million spent during the first three months of 2010.In March 2010, seasonal demand patterns, expectations of economic recovery and events related to earthquakes in Chile led to increased product margins. West Coast gasoline margins improved over 92% throughout the 2010 first quarter as compared to the fourth quarter of 2009 due to seasonal increases in demand however, high inventories limited increases in margin. West Coast gasoline inventories increased through the quarter ending March 2010 at levels above the five year average. From January 2010 to March 2010, U.S. West Coast benchmark diesel margins increased by 53% as diesel supplies adjusted to outages of Chilean refineries. During this period, crude oil differentials increased. Crude oil differentials are the price differences between light crude oils and heavy crude oils. For example, Oriente crude (a South American heavy crude oil) traded for approximately $9.00 per barrel below WTI (a benchmark light crude oil) in March compared to approximately $5.30 per barrel in January.
Our net loss was $155 million ($1.11 per diluted share) for the three months ended March 31, 2010 (2010 Quarter), compared with net earnings of $51 million ($0.37 per diluted share) for the three months ended March 31, 2009 (2009 Quarter).
Overview. Operating income for our refining segment decreased by $346 million during the 2010 Quarter primarily due to lower gross refining margins, higher stock-based and incentive compensation costs and the impairment charge related to our Los Angeles refinery. The significantly lower gross refining margin per barrel negatively impacted total gross refining margins by $315 million during the 2010 Quarter.
Gross Refining Margins. Our gross refining margin per barrel decreased to $6.36 per barrel in the 2010 Quarter, compared to $12.14 per barrel in the 2009 Quarter reflecting significantly lower industry diesel fuel and gasoline margins. The decrease in industry diesel fuel margins reflects lower global demand and significantly higher U.S. inventories. Industry gasoline margins on the U.S. West Coast declined significantly in the 2010 Quarter as compared to the 2009 Quarter, primarily due to excess gasoline inventories.
Costs of Sales and Expenses. Our average costs of sales increased 80% to $82.82 per barrel during the 2010 Quarter reflecting significantly higher crude oil prices. Manufacturing and other operating expenses increased to $324 million in the 2010 Quarter, compared to $316 million in the 2009 Quarter, primarily reflecting the incentive compensation recorded for the refining segment. The increase in loss on asset disposals and impairments includes a $20 million impairment charge related to our Los Angeles refinery.
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