HollyFrontier profit jumps on cheap crude

Cheaper crude fuels HollyFrontier profit, but not as much as Wall Street thought it would

Associated Press

DALLAS (AP) -- HollyFrontier's fourth-quarter profit jumped 75 percent as gasoline and other fuel prices escalated while the cost of crude, its main feedstock, fell.

Shares slid 3 percent in premarket trading however, with Wall Street expecting even fatter profits.

The Dallas company earned $391.6 million, or $1.92 per share, for the quarter that ended Dec. 31. During the same period a year earlier it earned $223.4 million, or $1.06 per share.

The quarter included charges of $21.6 million, or 11 cents per share. Even removing those charges, profits were well short of the $2.22 per-share that analysts had been looking for, according to a survey by FactSet.

Revenue rose 3.5 percent to $5.15 billion, more than the $4.98 billion expected by analysts.

HollyFrontier runs refineries in El Dorado, Kan.; Tulsa, Okla.; Artesia, N.M.; Cheyenne, Wyo.; and Woods Cross, Utah. It also sells petroleum products in several Western and Plains states.

Refiners in that part of the country have benefited from a boom in domestic drilling, which has led to cheaper gasoline in the West, compared with the ship-borne crude used by many refiners on the East Coast. HollyFrontier's input costs for crude oil and other raw petroleum fell 6.1 percent to $92.64 per barrel. Going out the other end of the refinery, the average sale price for each barrel rose 2.3 percent to $116.64. Its gross margin per barrel jumped from 15.3 percent a year ago to 24 percent in the most recent quarter.

CEO Mike Jennings said the same factors should work in the company's favor this year, allowing the continuance of both regular and special dividends.

Shares of HollyFrontier Corp. fell $1.50 to $53.10 in premarket trading.

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