Tesoro Earnings: Higher Expenses Shrinks Margins, Profit Declines

S&P 500 (NYSE:SPY) component Tesoro Corporation (NYSE:TSO) reported its results for the third quarter. Tesoro is an independent petroleum refiner and marketer in the United States that refines crude oil, sells refined products in bulk and wholesale markets and sells motor fuels in the retail market.

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Tesoro Corporation Earnings Cheat Sheet

Results: Net income for Tesoro Corporation fell to $273 million ($1.92 per share) vs. $345 million ($2.39 per share) a year earlier. This is a decline of 20.9% from the year-earlier quarter.

Revenue: Rose 8.3% to $8.78 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Tesoro Corporation reported adjusted net income of $2.05 per share. By that measure, the company fell short of mean estimate of $2.37 per share. It beat the average revenue estimate of $6.43 billion.

Quoting Management: “Our solid operating performance and high refinery utilization allowed us to capture attractive market conditions,” said Greg Goff, President and CEO. “We made significant progress on our high-return capital program, executed our second asset sale to TLLP and announced the transformational acquisition of BP`s Southern California refining and marketing business.”

Key Stats:

Revenue has risen for the last four quarters. Revenue increased 1.8% to $8.11 billion in the second quarter. The figure rose 19.8% in the first quarter from the year earlier and climbed 39.9% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 59 cents, and in the first quarter, it was ahead by 11 cents.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the fourth quarter has risen to $1.18 per share from 58 cents. Over the past three months, the average estimate for the fiscal year has climbed from $4.84 per to share to $6.79.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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