UPDATE 2-Holly Corp Q1 profit beats Street View

(Recasts, adds details, analyst comments, share movement)

By Hezron Selvi

BANGALORE, May 12 (Reuters) - Oil refiner Holly Corp (HOC.N: Quote, Profile, Research, Stock Buzz) reported a better-than-expected first-quarter profit, helped by an increase in volumes of produced refined products sold and higher prices, although earnings fell 87 percent from last year as margins were hurt by the record crude oil prices.

Holly's higher-than-expected profits comes at a time when companies that refine oil to produce gasoline and other fuels are struggling to pass through to their customers crude oil price increases of nearly 70 percent over the past year.

"While the company posted a lower refining margin per barrel than we were modeling for, higher products sold and a higher contribution from the sale of purchased products drove the beat," analyst Mark Flannery of Credit Suisse wrote in a research note.

For the quarter, refinery gross margins more than halved to $7.72 per produced barrel compared to the same period last year.

However, total volumes of refined products sold increased 6 percent, and average sales price received per produced barrel sold rose 38 percent to $103.20.

SOUR CRUDE

Holly continued to tap sour crude, or lower grade crude, to shore up its profits.