First Quarter Financial Report Card and Outlook - Report on Tesoro Corporation

Jul 23, 2015, 09:30 ET from www.aciassociation.com

NEW YORK, July 23, 2015 /PRNewswire/ --

ACI Association has initiated research coverage on Tesoro Corporation (NASDAQ: TSO). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.

Today, membership is open to readers on a complementary basis at the following URL: http://www.aciassociation.com/?c=TSO

Highlights from our TSO Report include:

  • Top-line Growth - On May 7, 2015, Tesoro Corporation released results for the first quarter of 2015. The Company generated consolidated revenue of $6.5 billion, compared to $9.9 billion in Q1 2014. Total segment operating income rose from $264 million in last year quarter to $424 million in Q1 2015. EBIT for the period amounted to $284 million, higher than $160 million in the previous year quarter. In addition, net earnings attributed to Tesoro Corporation were recorded at $145 million in Q1 2015, compared with $78 million in the prior year period. Consequently, the Company's earnings per share increased from $0.58 in Q1 2014 to $1.15 per share in Q1 2015. Adjusted earnings, excluding a net benefit from special items of $21 million after tax, stood at $124 million or $0.98 per diluted share. Further, Adjusted EBITDA for the Q1 2015, excluding special items, was $489 million compared to $362 million in the last year quarter.
  • Liquidity Position - The Company's total equity for Q1 2015 amounted to $7.1 billion, an increase from $7.0 billion in Q4 2014. Cash and cash equivalents for the period declined from $1.0 billion in previous quarter to $0.5 billion in the reported period. In addition, working capital was recorded at $1.58 billion, compared with $1.61 billion in the previous quarter. Further, total net debt to capitalization ratio stood sequentially flat at 37% for Q1 2015.
  • Refining Segment Performance - The Company's refining segment generated operating income of $190 million, higher than $185 million in Q1 2014. Total throughput of the segment declined from 817 million barrels per day (mbpd) in previous year quarter to 696 mbpd in Q1 2015. In addition, total yield stood at 738 mbpd, lower than 873 mbpd in prior year quarter. Further, refined product sales margin of the segment for the period was $9.02 per barrel, versus $9.53 per barrel in the same quarter last year.
  • TLLP Segment Highlights - the TLLP segment of the Company contributed $108 million in the total segment operating income, higher than $60 million in Q1 2014. The segment generated adjusted EBITDA of $168 million with strong contributions from the Rockies natural gas business. Meanwhile, total revenue of TLLP grew from $127 million in previous year same quarter to $263 million in Q1 2015. Further, operating expenses and general and administrative expenses of the segment stood at $86 million and $25 million, respectively for the first quarter of 2015.
  • Results of Retail Segment - The Company's retail segment generated operating income of $126 million, increasing significantly from $19 million in Q1 2014. Total average retail stations for the period were 2,261, compared to 2,270 in the previous year quarter. In addition, total fuel sales grew to 1,038 million of gallons from 995 million of gallons in prior year quarter. Further, total gross margins in Q1 2015 amounted to $208 million, compared with $113 million in last year quarter.
  • Outlook for 2015 - The Company expects to deliver $550 million to $670 million of business improvement in 2015. Tesoro has anticipated EBITDA of around $800 million for the second quarter and approximately $2.6 billion for full year 2015. In addition, Tesoro expects second quarter utilization of 90% to 95% and the Tesoro Index to be averaged about $21/bbl.

To find out how this influences our rating on Tesoro Corporation read the full report in its entirety here: http://www.aciassociation.com/?c=TSO

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