Crown reports net loss of $67.4 million in quarter Company official blames stiff competition, reduced profit margin

February 21, 1996|By Ted Shelsby | Ted Shelsby,SUN STAFF

Crown Central Petroleum Corp. reported yesterday that it posted a net loss of $67.4 million in the final quarter of 1995 that included an $80.5 million pretax write-off.

Earnings from continuing operations improved, but not enough to pull the company out of the red. The Baltimore-based oil refiner and marketer reported a fourth-quarter operating loss of $4.6 million, or 47 cents a share, compared with a loss of $4.9 million, or 51 cents a share, in the same period last year.

The net loss in the quarter included a write off for plant equipment at its Pasadena, Texas, refinery and an accounting change. The loss was equal to $6.91 a share. In the same quarter of 1994, Crown posted a net loss of $10.2 million, equal to $1.06 a share.

Revenues rose 20.1 percent in the fourth quarter to total $461.2 million,

John Wheeler, Crown's senior vice president and treasurer, blamed stiff competition and reduced profit margin for the fourth-quarter operating loss.

In 1994, he said margins were exceptionally strong at 18 cents. But in the most recent quarter, the difference between Crown's cost of producing a gallon of gasoline and the price it received for the product dropped to 12 cents.

"That amounts to about $5 million difference," said Mr. Wheeler.

For all of 1995, Crown posted a net loss of $70.6 million, or $7.20 a share, on revenues of $1.9 billion. This compares with a loss of $35.4 million, or $3.63 a share, from sales of $1.7 billion in 1994.

When all the charges against earnings are eliminated, Crown posted an operating profit of $34.7 million last year, equal to $3.53 a share. This is up from the $31.3 million operating profit, equal to $3.21 a share, in 1994.

Take away all of the charges against earnings and there are some "real bright spots," at Crown, said Kurt Funderburg, an analyst with Ferris, Baker Watts Inc.

Mr. Funderburg said Crown's refinery in Pasadena took a giant step toward improving its efficiency last year. The company cut its cost of refining a barrel of oil to $1.66. Mr. Funderburg said this is down from about $2 a barrel early last year.

The analyst noted Crown's efforts in growing its retail business, which allows it to sell its gasoline at a higher profit than when selling it to other retailers.

Joseph M. Coale, a spokesman for Crown, said the merchandising sales were up 12.3 percent last year and retail gasoline sales rose 6.6 percent.

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