Faced by rising oil prices, angry customers, Crown posts 0) sharply lower profits
Crown Central Petroleum Corp. said yesterday that it has been hurt by the squeeze between oil-well owners demanding high prices for crude oil and angry drivers demanding low gasoline prices.
The Baltimore-based oil-refining company said it earned $2.4 million in the three months that ended Sept. 30, one-fourth of profits it earned last year during the same period.
Crown spokesman William R. Snyder said the cost of the crude oil the company buys to turn into gasoline has soared since Iraq invaded Kuwait Aug. 2.
Crown sold the last of its wells and production facilities in 1987.
In late July, the price of the benchmark crude oil was $20.70 a barrel, Mr. Snyder said. Yesterday, crude was going for $33.79 a barrel.
During that time, Crown has raised its wholesale gasoline prices 28 cents a gallon, to about 70 cents.
"Our recovery is only about 60 percent" of the increase in crude costs, he said.
Mr. Snyder said Crown can't collect the full cost of the rise in crude because it must compete with larger oil companies that are keeping prices down.
Noting that crude prices have fallen this week, Mr. Snyder said that if the declines continue, Crown might benefit.
He said Crown still is likely to try to push up retail gasoline prices to recover some of its replacement costs.
In addition, Crown said it was hurt by the closing of 36 of its retail stores, as well as a fire at one of its refineries.
Crown's lower profits came as it reported sharply higher revenues of $501 million for the quarter, up 57 percent from the previous year.
Crown said the increase in revenues resulted mainly from the additional operations of the recently acquired La Gloria Oil and -- Gas Co. and from higher prices for refined products.
The Eastern Shore trucking company posted a $19.45 million loss in the third quarter, which it attributed to the unprofitable operations and eventual closing of two subsidiaries.
The loss came as no surprise. Earlier this month, when Preston announced that it was shutting down the operations of Pioneer Transportation Systems Inc. of Hurlock, Md., and Reeves
Transportation Co. of Calhoun, Ga. it reported that it expected to take a loss of $3.37 a share for the quarter that ended Sept. 30.
That prediction missed the mark by the slightest of margins. Preston posted a deficit equal to $3.38 a share.
Looking ahead, William B. Potter, president and chief executive officer, said in a prepared statement that the corporation "will now devote its resources to its other subsidiaries which are doing very well in the short-haul, less-than-truckload segment of the trucking industry."
As a group, he pointed out that revenues for the remaining companies increased 14 percent and operating income rose 42 percent over the third quarter of 1989.
"Our recent actions mean that future results will not be affected by the losses associated with Pioneer and Reeves," he said. "This, in turn, enables us to pay down debt, reduce interest payments, and strengthen the corporation's cash flow while providing sufficient capital to meet the needs of Saia, Preston Trucking Company, and Smalley," its other subsidiaries.
Crown Cork & Seeal Co.
The purchase of the packaging operations of Continental Can nearly doubled this Philadelphia-based company's sales.
But profits remained almost flat because of the interest expense associated with the $336 million corporate takeover, Crown officials said yesterday.
The purchase of the canning operations in July made Crown the second-largest packager in the United States but will likely drain earnings for several more months, said Henry Butwel, chief financial officer of the 14,000-person company.
Crown, which has a 250-person machinery plant in Baltimore, said its sales of cans and other food packaging are strong, however.
Baltimore Gas & Electric Co.
Continuing repairs to the troubled Calvert Cliffs nuclear power plant hurt profits at Baltimore Gas & Electric Co. during the summer, the Baltimore utility reported yesterday.
Profits for the third fiscal quarter dropped nearly 8 percent to $109 million in the three months that ended Sept. 30, even though revenues from power and natural gas jumped about $60 million to more than $601 million.
BG&E attributed the drop in profits to repairs to Calvert Cliffs and improvements to the utility's power distribution system.
The earnings decline came as sales of power to area homes rose slightly, the company said. Sales of power to residential customers has increased 2 percent so far this year, reflecting an increase in the number of customers, the company said. Commercial and industrial sales remained flat.
On the whole, sales of electricity for the nine months that ended Sept. 30 increased nearly 1 percent from the comparable period last year, the company said.