Tesoro Corporation (TSO) has reported a 44.44 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $78 million, or $0.66 a share in the quarter, compared with $54 million, or $0.45 a share for the same period last year. Revenue during the quarter grew 6.04 percent to $6,652 million from $6,273 million in the previous year period. Gross margin for the quarter contracted 621 basis points over the previous year period to 16.82 percent. Total expenses were 96.63 percent of quarterly revenues, down from 97.03 percent for the same period last year. This has led to an improvement of 40 basis points in operating margin to 3.37 percent.
Operating income for the quarter was $224 million, compared with $186 million in the previous year period.
"We made excellent progress in 2016 executing our growth and productivity improvement strategies. This included achieving very strong safety and refining availability, delivering annual improvements to operating income and making strategic acquisitions that position the Company for further growth. We returned approximately $500 million to shareholders in the form of share repurchases and dividends and invested in high-return capital projects. We achieved these results despite a challenging market environment characterized by lower refining margins and weaker crude oil differentials," said Greg Goff, chairman and chief executive officer.
Operating cash flow drops significantly
Tesoro Corporation has generated cash of $1,304 million from operating activities during the year, down 38.81 percent or $827 million, when compared with the last year. The company has spent $1,317 million cash to meet investing activities during the year as against cash outgo of $1,129 million in the last year.
Cash flow from financing activities was $2,366 million for the year as against cash outgo of $1,060 million in the last year period.
Cash and cash equivalents stood at $3,295 million as on Dec. 31, 2016, up 249.79 percent or $2,353 million from $942 million on Dec. 31, 2015.
Working capital increases sharply
Tesoro Corporation has recorded an increase in the working capital over the last year. It stood at $3,860 million as at Dec. 31, 2016, up 117.22 percent or $2,083 million from $1,777 million on Dec. 31, 2015. Current ratio was at 2.09 as on Dec. 31, 2016, up from 1.70 on Dec. 31, 2015.
Debt increases substantially
Tesoro Corporation has witnessed an increase in total debt over the last one year. It stood at $6,933 million as on Dec. 31, 2016, up 70.22 percent or $2,860 million from $4,073 million on Dec. 31, 2015. Total debt was 33.99 percent of total assets as on Dec. 31, 2016, compared with 24.94 percent on Dec. 31, 2015. Debt to equity ratio was at 0.85 as on Dec. 31, 2016, up from 0.53 as on Dec. 31, 2015.
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