Petro-Canada profit up 45%

Cash flow, providing a glimpse into an oil company's ability to fund development, rose to $879 million, or $3.31 a share, from $642 million, or $2.44 a share. Revenue climbed to $3 billion from $2.8 billion.

The Toronto Star
October 31, 2003

Petro-Canada profit up 45%
Oakville refinery closing hurts profit. Cash flow increases to $879 million.

CALGARY—Petro-Canada, the country's Number 3 oil producer and refiner, said yesterday quarterly profit jumped 45 per cent on strong oil and gas prices, but the result was hampered by a charge stemming from the closing of its Oakville refinery.

Petro-Canada, known for operations at home and in the North Sea, North Africa and South America, earned $304 million, or $1.13 a share, in the third quarter, up from a year-earlier $209 million, or 79 cents a share.

Net earnings included a $136 million charge on a decision in early September to close its 45-year-old Oakville refinery and supply the region from its Montreal plant. Petro-Canada also took an $11 million charge on asset sales.

The company realized a $45 million gain, meanwhile, on provisions in its international division.

Excluding the one-time items, earnings were $402 million, or $1.52 a share, beating an average estimate of $1.36 a share among analysts polled by Thomson First Call.

Cash flow, providing a glimpse into an oil company's ability to fund development, rose to $879 million, or $3.31 a share, from $642 million, or $2.44 a share.

Revenue climbed to $3 billion from $2.8 billion.

During the quarter, Petro-Canada and its rivals reaped rewards from world oil prices that were 7 per cent higher than the year before and Canadian natural gas prices that surged 87 per cent on fears, now mostly allayed, of winter shortages.

Production averaged 449,000 barrels of oil equivalent per day, compared with 446,100 in the year-earlier quarter. It said higher output from the Hibernia and Terra Nova oil projects off the East Coast and its MacKay River, Alta., oil-sands development was partly offset by lower production in the North Sea and field declines in Syria.

Refining and marketing posted a third-quarter loss of $42 million after the charge related to Oakville. Excluding that, earnings nearly doubled to $110 million due to rich industry-wide margins between the cost of crude oil and the price at which it sells gasoline wholesale.

Petro-Canada shares advanced 28 cents to close at $53.16 yesterday in trading on the Toronto Stock Exchange.

reuters news agency——
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