Falling crude prices continue to drive down profits for oil refiners after much of the industry achieved record-setting earnings in the previous year. Frontier Oil Corp. is one of the latest oil producers to take a hit from plummeting crude prices. The Houston-based company said Feb. 26 it incurred a loss of $97.4 million, or 94 cents a share, compared with net income of $43.4 million, or 41 cents per share, in the year-earlier period.
Frontier Oil attributes the fourth-quarter decline to an after-tax inventory loss of $245.1 million, or $2.38 per share, partially offset by an after-tax hedging gain of $115.6 million, or $1.12 per share.
At A Glance
Frontier Oil Corp.
Primary Industry: Petroleum & Coal Products
Number of Employees: 800
2007 In Review
Revenue: $5.19 billion
Profit Margin: 9.62%
Sales Turnover: 2.78
Inventory Turnover: 9.9
Revenue Growth: 8.19%
Return On Assets: 32.75%
Return On Equity: 64.33%
Despite the earnings loss, the company benefited from expanded capacity at its El Dorado refinery in Kansas. The facility produced record diesel yields as high as 48% of total crude charge. Diesel margins averaged $21.81 per barrel for the fourth quarter, compared with $17.51 per barrel for the same period in 2007.
Meanwhile, the light/heavy crude differential averaged $15.27 per barrel in the fourth quarter, compared with $27.96 per barrel during the year-earlier period. The West Texas Intermediate/West Texas Sour spread averaged $3.30 per barrel in the most recent quarter, compared with $6.95 per barrel in the previous year-end period.
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