Getty Petroleum’s Profit Down Sharply in First Quarter
PLAINVIEW, N.Y. (AP) _ Getty Petroleum Corp., a marketer in the midst of a major acquisition, said Friday that profit for its first quarter plunged to $1.1 million from $9.4 million a year earlier because of oil-price volatility.
The company said profit margins in the first quarter last year were exceptionally high because of the steep drop in crude oil prices. Getty said it was able to buy refined oil products such as gasoline at low wholesale prices and sell them at retail levels that remained high.
But in the latest first quarter crude prices were sharply higher and Getty said it wasn’t able to pass the increase along to retail customers, so profit margins declined despite higher sales.
On a per-share basis, Getty’s profit for the quarter ended April 30 dropped to 10 cents a share from 85 cents in the first quarter of last year. Revenue rose to $313 million from $260 million, boosted mainly by increases in the quantities of oil products sold, the company said.
Getty markets gasoline, heating oil and other petroleum products in 11 Northeast states under the Getty and Power Test brand names. The company is not related to Getty Oil Co., a subsidiary of oil giant Texaco Inc. Getty Petroleum, formerly called Power Test, acquired the Getty marketing assets and Getty name from Texaco for $68 million in February 1985.
Earlier this week, Getty Petroleum agreed to acquire Clark Oil and Refining Corp., a subsidiary of Apex Holding Co., for $300 million plus the value of Clark Oil’s inventories - estimated at around $100 million. Getty will also assume some of Clark Oil’s liabilities, totaling about $47 million.