4/28/2016 – 4:00 pm
Surplus gasoline inventories reduced profit margins for Marathon Petroleum Corp. The Courier reports that the companies profit margin plunged by over 99 percent last quarter from a year earlier. The profit dropped from $891 million a year to $1 million in the January-March quarter. Earnings translated to 0.3 cent per share.
Refining operations, which is where Marathon typically earns over 80 percent of its profit, lost $62 million compared with generating $1.3 billion profit a year earlier. Its gross profit fell 62 percent to $9.98 per barrel. Refinery maintenance and upgrades also reduced the amount of fuel sold to retailers.
Speedway’s operating profit declined by $1 million to $167 million. The pipeline and logistics segment increased operating profit by 86 percent to $167 million. Costs not allocated to any single segment reduced operating income by $197 million. They included a $129 million writedown in the value of assets acquired in the purchase of MarkWest, due to reduced natural gas and natural gas liquids prices. Corporate and other expenses reduced operating profit by an additional $68 million.
Speedway widened its profit margin on merchandise sold in the store to 29 percent last quarter from 28 percent a year earlier. Gross profit on in-store merchandise was $330 million, or over half of the stations’ gross profit. Gross profit on fuels was about $250 million. The profit margin on fuels slipped 14 percent to 16.82 cents per gallon. Speedway sold 3.5 percent more fuel or 1.5 billion gallons.
More: The Courier
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