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DIAMOND SHAMROCK REPORTS INCREASE IN SECOND QUARTER EARNINGS

 DIAMOND SHAMROCK REPORTS INCREASE IN SECOND QUARTER EARNINGS
 SAN ANTONIO, Texas, July 20 /PRNewswire/ -- Diamond Shamrock, Inc. (NYSE: DRM) today reported second quarter earnings of $23.5 million or $0.82 per share, up from $17.7 million or $0.70 per share for 1991.
 Earnings for the first six months were $12.7 million or $0.44 per share, compared to $22 million or $0.88 per share for the same period last year.
 Revenues were $648 million for the quarter and $1,233.6 million for the first six months of the year, compared to $631.2 million for the second quarter last year and $1,270.8 million for the first six months of 1991.
 Commenting on the results, Diamond Shamrock Chairman, President, and CEO Roger Hemminghaus said, "Even though the economic recovery is disappointingly slow and gasoline demand nationwide is up only about 1 percent for the year, Diamond Shamrock recorded higher earnings on relatively strong margins and higher sales volumes for the second quarter. Refinery throughput is up, and we received full benefit from last year's retail store acquisitions."
 Gasoline sales volumes through the company's Corner Stores were up 7.5 percent over the same quarter last year, and merchandise sales continued a steady climb, increasing over the second quarter of 1991 by 18.2 percent.
 As petroleum prices increased during the second quarter, earnings were positively impacted by an estimated inventory revaluation of $9 million after tax, compared to an inventory revaluation of approximately $5 million after tax in the second quarter of last year.
 Hemminghaus explained that significant projects that Diamond Shamrock currently has under way are continuing on schedule.
 A 270-mile, 14-inch crude oil pipeline from Wichita Falls to the McKee refinery will be completed in September. This pipeline will provide connections to major industry pipelines and will give the refinery a more flexible and lower cost crude supply from both domestic and foreign sources.
 Construction of a products pipeline from the company's Three Rivers refinery to Laredo is virtually complete, and the products terminal in Laredo will be operational in September.
 "Ours will be the only pipeline connected products terminal in Laredo, and it will position the company to move more gasoline and diesel into this area of south Texas and across the border into Mexico," Hemminghaus commented.
 Construction of the propylene export terminal on the Houston Ship Channel is nearing completion, and it is scheduled to be operational next month. The terminal, which is connected by pipeline to the company's Mont Belvieu facility, is a joint venture project that will provide access to foreign propylene markets.
 At the Diamond Shamrock refineries, construction of the diesel hydrotreater at McKee and the expansion and hydrocracker construction at Three Rivers are also continuing on schedule with a mid-1993 completion.
 "Diamond Shamrock is somewhat unique in the refining industry in that most of our capital spending through 1995 will be for projects that improve margins and provide attractive rates of return. Relatively little of our capital is required for maintenance or environmental projects," Hemminghaus pointed out.
 "Nevertheless, because of disappointing results year-to-date and near-term margin uncertainties, we believe it is prudent to take a hard look at delaying certain projects to preserve a strong balance sheet and financial flexibility," he said.
 "We remain optimistic about the longer term as our projects are completed and come on-stream, adding earnings power. As the economy strengthens, gasoline demand will improve, and capacity will tighten as marginal refineries and convenience stores, unable or unwilling to make environmental expenditures, continue to close over the next several years," Hemminghaus predicted.
 Diamond Shamrock, Inc., with annual sales of $2.6 billion, is a regional refiner and marketer of petroleum products. The San Antonio- based corporation has two Texas refineries, markets gasoline through approximately 2,000 Diamond Shamrock branded outlets, manufactures and markets petrochemicals, and stores and markets natural gas liquids.
 DIAMOND SHAMROCK, INC.
 Preliminary Results
 (Unaudited; dollars in millions, except per share)
 Periods ended Three Months Six Months
 June 30 1992 1991 1992 1991
 Sales and operating
 revenues $648.0 $631.2 $1,233.6 $1,270.8
 Income before tax provision 39.1 27.6 21.1 34.3
 Net income 23.5 17.7 12.7 22.0
 Primary earnings
 per common share $0.82 $0.70 $0.44 $0.88
 Fully diluted earnings
 per common share 0.82 0.65 0.44 0.83
 Average common shares
 outstanding (millions):
 Primary 28.7 25.3 28.7 24.9
 Fully diluted 28.7 28.5 28.7 28.4
 -0- 7/20/92
 /CONTACT: Kathy Hughes, 512-641-8846, or Bill Strain (investors), 512-641-8708, both of Diamond Shamrock/
 (DRM) CO: Diamond Shamrock Inc. ST: Texas IN: OIL SU: ERN


CK -- NY027 -- 0643 07/20/92 10:30 EDT
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Date:Jul 20, 1992
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