FINDLAY, Ohio (AP) -- Marathon Petroleum saw profit jump nearly 13 percent in the first quarter as gasoline prices rose while the refiner was able to keep raw materials costs relatively low.
The Findlay, Ohio company reported earnings of $596 million, or $1.70 per share, for the first three months of the year. That compares with $529 million, or $1.48 per share, for the same part of 2010. Revenue increased by 13.5 percent to $20.3 billion in.
Analysts were expecting a profit of only $1.37 per share on revenue of $16.1 billion, according to FactSet.
Marathon Petroleum's six refineries, which run from Texas City, Texas to Detroit, use a large quantity of Midwestern crudes that were cheaper than international oil varieties by an average of $15 per barrel in the first quarter. The lower cost, combined with higher prices for gasoline and other fuels, helped its refineries generate larger profits than last year.
On average, the company's refineries earned $8.36 per barrel produced compared with $6.73 per barrel produced last year. The higher returns boosted profits for its refining and marketing business by 17.6 percent in the quarter to $943 million.
The company's Speedway retail gas stations increased profits 51.5 percent to $50 million while its pipeline business saw a 17.6 percent decline in profits at $42 million.
Marathon Petroleum, which split from Marathon Oil Corp. last July, said in a separate announcement that it is considering the formation of a master limited partnership. If it pursues one, Marathon said it would contribute a portion of its pipeline business, and then sell minority stakes in the company through an initial public offering. The partnership would then invest in pipeline projects through the Midwest and the Gulf Coast.
The company said it hasn't decided whether to pursue a master limited partnership yet.
Shares rose by $1.28, or 3 percent, to $42.89 in premarket trading.
