Sunoco's Q4 net income mounts YOY; Chemicals segment posts quarterly loss

Sunoco, Inc. recorded net income of US$204 mln ($1.74 per share diluted) for the Q4 2008 compared to a net loss of US$9 mln ($0.08 per share diluted) for same quarter previous year. Excluding special items, the company posted income of US$313 mln ($2.68 per share diluted) for Q4 2008 versus US$23 mln ($0.20 per share diluted) for the same period a year ago. For FY2008, Sunoco's net income stood at US$776 mln ($6.63 per share diluted) against US$891 mln ($7.43 per share diluted) for the FY2007. Excluding special items, income for 2008 was US$874 mln ($7.46 per share diluted) versus US$833 mln ($6.94 per share diluted) for the FY2007. "While the slowing U.S. economy and declining gasoline demand led to lower refining margins during 2008, a record contribution from our non-refining businesses resulted in year-over-year operating earnings growth for Sunoco. In addition, despite the sharp decline in crude oil prices in the second half of the year that resulted in a significant increase in working capital requirements," said Lynn Elsenhans, Sunoco's Chairman and Chief Executive Officer. The company's Chemicals segment had a loss of US$4 mln in last quarter of 2008 versus a loss of US$2 mln in the prior-year period mainly attributable to a US$12 mln after-tax provision to write down Chemicals' polymers inventory to market value. Although the feedstock costs for quarter declined, chemicals margins exited 2008 under considerable pressure owing to a low industry demand. Sunoco's Refining and Supply segment earnings increased to US$182 mln for the Q4 2008 versus US$43 mln in Q4 2007 due to reduced industry production related to hurricane activity and falling crude oil prices that led to higher realized margins early in the quarter. Further, the company's Retail Marketing, Logistics and Coke segment posted strong YOY earnings for the quarter. As far as future outlook is concerned, Elsenhans says, "As we enter 2009, we expect a challenging market for petroleum and chemical products that reflects continued economic weakness and additional global supply. However, our non-refining businesses should continue to provide a solid base of earnings and operating cash flow. "
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