* Second-quarter earnings $1.29/share vs est. $1.31
* Sales rise 79 pct to $4.35 bln
* Refinery gross margin slips to $23.42/barrel from $25.69
(Adds details, shares)
Aug 5 Western Refining Inc reported a
lower-than-expected quarterly profit as the company's refining
margins fell due to higher crude costs.
U.S. refiners such as Western Refining had typically enjoyed
strong margins as they refined cheap shale crude into products
such as gasoline and diesel, which are sold at prices linked to
the more expensive Brent crude.
But the recent runup in U.S. crude oil prices weighed on
Western Refining's profit in the second quarter ended June 30.
Although the company's revenue shot up 79 percent, a nearly
88 percent jump in the cost of products sold hurt margins.
Refinery gross margins slipped to $23.42 per barrel in the
second quarter from $25.69, a year earlier.
Chief Executive Jeff Stevens, however, said the third
quarter was off to a "strong start."
Western Refining, which operates refineries in El Paso,
Texas and Gallup in New Mexico, said its priority this year was
to expand its crude gathering capacity in the fast-growing
Permian and San Juan basins.
The company said its TexNew Mex pipeline, which it is
reversing and extending to move crude oil from New Mexico's San
Juan Basin, would start operating in early 2015.
Western Refining's net profit rose to $156.7 million, or
$1.56 per share, in the second quarter from $149.3 million, or
$1.46 per share, a year earlier.
Excluding items, the company earned $1.29 per share.
Revenue rose to $4.35 billion from $2.43 billion a year
Analysts on average had expected a profit of $1.31 per share
on revenue of $3.29 billion, according to Thomson Reuters
Western Refining's shares closed at $41.16 on the New York
Stock Exchange on Monday. The stock had risen nearly 35 percent
in the year to Monday's close.
(Reporting by Swetha Gopinath in Bangalore; Editing by Kirti