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SUN REPORTS SECOND QUARTER NET INCOME OF $70 MILLION, BEST QUARTER IN THREE YEARS

      Operating Income Was $42 Million, Sixth Consecutive Quarter
               Of Improvement And Highest In Two Years
    PHILADELPHIA, July 22 /PRNewswire/ -- Sun Company, Inc. (NYSE: SUN) today reported net income of $70 million ($.66 per share) for the second quarter of 1993, the company's best results since the second quarter of 1990 and also up sharply from the $6 million ($.06 per share) net income reported for last year's second quarter.
    Revenues were $2.4 billion versus $2.6 billion a year ago.
    Of the $70 million net income, $42 million ($.39 per share) was operating income, the sixth consecutive quarterly increase in operating income and also the highest level since the second quarter of 1991. During the year-ago quarter, operating income was break-even.
    Sun Chairman and CEO Robert H. Campbell said the principal reasons for the dramatic increase in operating income were:
    -- higher earnings in Sun's fuels operations, due largely to increased margins on branded gasoline and improved refining operations;
    -- increased income from international oil and gas production;
    -- elimination of losses from international oil and gas exploration activities outside of Canada due to Sun's October 1992 decision to withdraw from such activities;
    -- higher earnings at the oil sands operations of Suncor, Sun's 55-percent-owned Canadian subsidiary.
    "This performance clearly shows the impact of our October 1992 decision to focus on our domestic value-added businesses and our international oil and gas production activities," Campbell said.  "The improved financial results are in line with what we expected to occur as we implemented our new strategy.  We feel good about our financial performance to date and optimistic about the future."
    The second quarter operating income of $42 million excluded after- tax gains of $19 million from the May 1993 sale of 6.8 million shares of Suncor common stock and $9 million from the sale of certain oil and gas properties in Dubai and Canada.  The Suncor stock sale reduced Sun's ownership in its Canadian subsidiary from 68 percent to approximately 55 percent and resulted in pre-tax net proceeds to Sun of approximately $140 million (U.S.).
    SECOND QUARTER INCOME BY SEGMENT
    Fuels
    Sun's Fuels business earned $13 million in the second quarter.  All income was attributable to Branded Marketing, which increased its earnings from $5 million in the 1992 second quarter due to improved retail gasoline margins.  The higher margins were partially offset by lower gasoline sales volumes resulting from Sun's August 1992 decision to withdraw from branded gasoline marketing in Oklahoma, Missouri, and Iowa.
    Wholesale Fuels broke even for the quarter, versus a loss of $1 million in the 1992 second quarter.  Wholesale gasoline margins were reduced from the year-ago quarter, but stronger margins on other products, particularly asphalt, more than offset this decline.  (Sun's Philadelphia Refinery is a significant asphalt supplier in the Northeast.)  Higher refinery fuel costs also adversely impacted Wholesale Fuels income.
    Lubricants
    Sun's Lubricants business earned $6 million for the quarter, a $2 million increase from the 1992 period.  Income from sales of lubricants declined from the year-ago level of $20 million to $14 million in the current quarter as weak product demand and high industry inventories eroded margins.  However, losses from related fuels operations declined even more -- from $16 million in the 1992 quarter to $8 million in the current quarter -- due to improved operations at the Puerto Rico and Tulsa refineries.
    Chemicals
    The generally sluggish worldwide economy contributed to a decline in Chemicals income from the year-ago level of $11 million to $2 million in the current quarter.  Margins were squeezed by the combination of lagging industry demand, especially in the export market, and increases in feedstock (gasoline and natural gas) costs.
    Logistics
    Logistics (pipeline and terminal) income was $14 million, up by $2 million from the 1992 quarter.
    International Exploration and Production
    Income from Sun's international exploration and production activities was $11 million for the second quarter of 1993, versus a loss of $10 million during the 1992 second quarter.
    Of the $21 million quarter-to-quarter increase, $11 million came from the elimination of exploration-related expenses resulting from Sun's October 1992 decision to withdraw from exploration activities outside of Canada.  (In last year's second quarter, such expenses totalled $11 million after-tax.)
    Production income rose from $1 million to $11 million due to higher natural gas volumes and prices, lower costs and operating/administrative expenses, and a lower effective tax rate.  These factors were partially offset by crude oil production declines caused by operating problems at Sun's Glamis production facility in the British North Sea.
    Suncor
    Sun's income from its 55 percent interest in Suncor, a fully integrated Canadian subsidiary, was $7 million during the 1993 second quarter, versus a loss of $8 million in the year-ago period, when Sun owned 68 percent of the Suncor common stock.
    Most of the improvement occurred in the oil sands operation, which increased its income to $6 million from a loss of $7 million in the 1992 second quarter.  The main factor was higher sales volumes of synthetic crude oil.  Production volumes were low in both quarters, with plant output curtailed by a fire in the 1992 quarter and by a planned maintenance shutdown completed in the current quarter.  Also contributing to the improved 1993 oil sands results was a $7 million after-tax gain from the settlement of claims resulting from a 1987 fire at the plant.
    SIX MONTH RESULTS
    Sun's net income for the first six months of 1993 was $110 million ($1.03 per share), compared with a net loss of $276 million ($2.60 per share) for the same period last year.
    The 1993 first half results included income of $33 million from special items consisting of:
    -- $19 million after-tax gain on the sale of Suncor stock;
    -- $9 million after-tax gain on the divestment of certain oil and gas properties;
    -- $5 million tax benefit related to the adoption of Statement of Financial Accounting Standards (SFAS) No. 109, which changed the method of accounting for deferred income taxes.
    The 1992 six month results included:
    -- an $8 million after-tax loss on the sale of Suncor stock;
    -- $13 million of income from Sun's now-discontinued coal operation; and
    -- a $261 million after-tax charge resulting from the adoption of SFAS No. 106, which changed the method of accounting for postretirement health care and life insurance benefits.
    Excluding these items, operating income was $77 million for the first half of 1993 versus an operating loss of $20 million in the 1992 period.
    The improvement in first half operating earnings was attributable to:
    -- improved fuels results, due largely to higher branded gasoline margins and to higher wholesale product margins resulting from improved refinery operations.  These were partially offset by lower sales volumes and higher refinery fuel costs;
    -- increased income from international production activities due to lower depreciation expense, lower costs and operating expenses and a lower effective tax rate, all of which more than offset lower crude oil production volumes and prices;
    -- the elimination of losses from international exploration activities;
    -- improved income at Suncor's oil sands operation due to lower operating and administrative costs and the $7 million after-tax gain from settlement of all claims resulting from the 1987 fire at the oil sands plant;
    -- lower net financing expenses due to a $3 million after-tax gain on the sale of an equity investment and higher capitalized interest.
    Partially offsetting these positive factors were lower margins on the sale of petrochemical and lubricant products due to generally weaker market conditions, particularly in the second quarter of 1993.
    Revenues were $4.7 billion for the first six months of 1993, versus $5.0 billion for the 1992 six-month period.
    STRATEGIC ACTIONS
    In reviewing the second quarter and six-month results, Campbell noted that Sun has taken several actions this year in continuing its strategy of focusing on its domestic value-added businesses -- branded gasoline marketing in the Northeast, lubricants, chemicals, and logistics -- and on its international oil and gas production activities. These include:
    -- acquiring 23 gasoline outlets in the western Massachusetts area;
    -- purchasing a 126-mile crude oil pipeline in Ohio and Michigan;
    -- deciding to convert Atlantic gasoline outlets to Sunoco and Sunoco Food Markets to A-Plus convenience stores;
    -- acquiring the lease to supply 21 high-volume service stations along the Pennsylvania Turnpike;
    -- beginning engineering on a project to double benzene production to 60 million gallons a year at the Delaware Valley Refining Complex (Sun's Marcus Hook and Philadelphia refineries);
    -- agreeing to sell exploration interests in 10 U.K. North Sea blocks (subject to British government approval), reducing Sun's U.K. exploration portfolio to seven blocks;
    -- signing an agreement for the sale of a major portion of the office portfolio of Radnor Corporation, Sun's wholly owned discontinued real estate subsidiary;
    -- completing the sale of Cordero Mining Company, located in the Powder River Basin of Wyoming, for approximately $120 million.  Sun continues to pursue the sale of its remaining coal assets.
    Sun Company, headquartered in Philadelphia, operates five domestic refineries and is engaged principally in retail gasoline marketing in the Northeastern quadrant of the United States, petrochemical sales throughout the U.S., sales of lubricants worldwide, and the operation of domestic pipelines and terminals.  Sun also produces crude oil and natural gas internationally and is 55-percent owner of Suncor, a fully integrated Canadian oil company.
                           SUN COMPANY, INC.
             1993 Second Quarter and Six Months Financial Summary
    Second Quarter                     1993                    1992
    Revenues                      $2,439,000,000         $2,604,000,000
    Income from Continuing
      Operations                     $70,000,000                    ---
    Net Income                       $70,000,000             $6,000,000
    Income per Share of Common
      Stock from Continuing
      Operations                            $.66                    ---
    Net Income per Share
      of Common Stock                       $.66                   $.06
    Weighted Average Number of
      Common Shares Outstanding
      (In Thousands)                     106,495                106,193
    Six Months
    Revenues                      $4,743,000,000         $5,038,000,000
    Income (Loss) from Continuing
      Operations before Cumulative
      Effect of Change in Accounting
      Principle                     $105,000,000           $(28,000,000)
    Net Income (Loss)               $110,000,000          $(276,000,000)
    Income (Loss) per Share of Common
      Stock from Continuing Operations
      before Cumulative Effect of
      Change in Accounting Principle        $.98                  $(.26)
    Net Income (Loss) per Share
      of Common Stock                      $1.03                 $(2.60)
    Weighted Average Number of
      Common Shares Outstanding
      (In Thousands)                     106,469                106,141
                  Earnings Profile of Sun Businesses (after tax)
                             (Millions of Dollars)
    Three months ended June 30                1993     1992(A)  Variance
    FUELS
      Wholesale Fuels                         --     $ (1)       $ 1
      Branded Marketing                       13        5          8
    LUBRICANTS
      Lubes                                   14       20         (6)
      Related Fuels                           (8)     (16)         8
    CHEMICALS                                  2       11         (9)
    LOGISTICS                                 14       12          2
    INTERNATIONAL EXPLORATION AND PRODUCTION
      Exploration                             --      (11)        11
      Production                              11        1         10
    CANADA (SUNCOR)(B)
      Exploration and Production               1        1         --
      Oil Sands                                6       (7)        13
      Refining and Marketing                  --        1         (1)
      Corporate Expenses(C)                   --       (2)         2
      Net Financing Expenses                  --       (1)         1
           Total Canada (Suncor)               7       (8)        15
    CORPORATE
      Corporate Expenses                      (4)      (5)         1
      Net Financing Expenses                  (7)      (8)         1
                                              42       --         42
    GAIN ON SALE OF SUNCOR STOCK              19       --         19
    GAIN ON DIVESTMENT OF E&P PROPERTIES       9       --          9
    INCOME FROM DISCONTINUED COAL OPERATIONS  --        6         (6)
    CONSOLIDATED NET INCOME                  $70     $  6        $64
    NET INCOME PER SHARE OF
      COMMON STOCK                          $.66     $.06         --
    (A) Restated to conform to 1993 presentation.
    (B) Sun reduced its ownership interest in Suncor from approximately 68 percent to 55 percent in May 1993.
    (C) Includes consolidation adjustments.
                               SUN COMPANY, INC.
                Earnings Profile of Sun Businesses (after tax)
                             (Millions of Dollars)
    Six months ended June 30                 1993   1992(A)  Variance
    FUELS
      Wholesale Fuels                        $(31)    $(44)     $ 13
      Branded Marketing                        32       20        12
    LUBRICANTS
      Lubes                                    33       39        (6)
      Related Fuels                           (21)     (33)       12
    CHEMICALS                                   9       20       (11)
    LOGISTICS                                  24       22         2
    INTERNATIONAL EXPLORATION AND PRODUCTION
      Exploration                              --      (26)       26
      Production                               36       16        20
    CANADA (SUNCOR)(B)
      Exploration and Production                2       --         2
      Oil Sands                                12       (6)       18
      Refining and Marketing                    3        3        --
      Corporate Expenses(C)                    (3)      (4)        1
      Net Financing Expenses                   (1)      (2)        1
           Total Canada (Suncor)               13       (9)       22
    CORPORATE
      Corporate Expenses                       (8)      (9)        1
      Net Financing Expenses                  (10)     (16)        6
                                               77      (20)       97
    GAIN (LOSS) ON SALE OF SUNCOR STOCK        19       (8)       27
    GAIN ON DIVESTMENT OF E&P PROPERTIES        9       --         9
    INCOME FROM DISCONTINUED COAL OPERATIONS   --       13       (13)
    CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE(D)                   5     (261)      266
    CONSOLIDATED NET INCOME (LOSS)           $110    $(276)     $386
    NET INCOME (LOSS) PER SHARE OF
      COMMON STOCK                          $1.03   $(2.60)
    (A) Restated to conform to 1993 presentation.
    (B) Sun reduced its ownership interest in Suncor from 75 percent to approximately 68 percent in March 1992 and to 55 percent in May 1993.
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Date:Jul 22, 1993
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