Nikiski refinery benefits from utility cost hikes
Tesoro Petroleum Corp. officials say the company has increased production at its Nikiski refinery to make up for production cuts in Washington due to climbing Pacific Northwest utility rates.
Tesoro owns refineries in Nikiski, Washington and Hawaii. Higher electric rates have increased Washington refinery costs since May, the company said. Tesoro expects fourth-quarter electric costs will be $3 million to $5 million higher than in the third quarter.
Higher electric rates led Tesoro in mid-December to reduce production from its Washington refinery. It has adjusted operations to reduce electric consumption by about a third and taken other steps to conserve fuel. To meet expected demand, it increased production at the Nikiski refinery.
Tesoro expects strong fourth-quarter earnings of $.55 to $.66 per diluted share, thanks to unusually strong margins for West Coast refined products.
"With these strong margins, the company's system-wide refinery throughput for the fourth quarter will be at the higher end of the previously announced 250,000 to 260,000 barrel-per-day range," Tesoro announced.
The company is on track to beat projections from a research firm called First Call, which forecast Tesoro's fourth-quarter earnings at $.18 per share.
"Good margins combined with our profit improvement initiatives should push total earnings for the year 2000 to between $1.72 and $1.82 per diluted share, compared to $.62 per share last year," said Bruce A. Smith, chairman and chief executive.
Smith said he expects earnings next year will be less, but they still will exceed the five-year average.
"To partially mitigate the decline, the company continues its commitment to high return capital projects and the cost reduction and revenue improvement programs previously announced," he said.
Tesoro announces capital spending plans
Tesoro Petroleum Corp. plans $195 million in 2001 capital spending, up from roughly $95 million spent this year. The 2001 capital budget includes $121 million for refinery projects -- $81 million for economic projects, $28 million for sustaining capital and $12 million for environmental, health, safety and other projects. The budget includes $64 million to complete a residue-reduction project at the Washington refinery.
Tesoro plans to spend $59 million to expand retail marketing, including construction of about 70 Mirastar gas stations at Wal-Mart sites, construction of new Tesoro-owned and operated stations and expansion of Tesoro's branded dealer network.
Tesoro has budgeted $5 million for marine services capital projects and $10 million for other capital projects, primarily for information systems to support expanded retail operations and other upgrades.
Kroger Co. earnings rise
The Kroger Co., owner of the Fred Meyer chain, reported third-quarter earnings of $0.28 per diluted share, excluding costs related to mergers and one-time expenses. That is an increase of 17 percent over the third quarter of 1999. Total third-quarter sales increased 6.1 percent to $11.0 billion. Food store sales also rose 6.1 percent.
Alaskans take fewer home loans
Alaska residential lending during the first six months of 2000 fell to the lowest level since 1997, according to analyst James Wiedle of the Alaska Housing Finance Corp.
"There is no doubt that rising interest rates have had a cooling effect on residential lending activity in Alaska," Wiedle said. "This is especially true in larger communities like Anchorage, where the inventory of homes for sale has dwindled, while the average sales price of new construction has accelerated in the last two years."
Lenders reported 3,536 single-family and condominium loans for a total of $574 million during the first six months of 2000. That is down from 4,893 loans for $692 million for the first half of 1999.
The largest decline was in Anchorage, which still garnered nearly half the state's residential loan activity. The Matanuska-Susitna Valley and Fairbanks reported big drops in loan activity but increases in loans for condominium purchases.
Seasonal job losses sting peninsula
October unemployment in the Kenai Peninsula Borough was 8.5 percent, up from 5.9 percent in September but down from 10.4 percent in October last year, the state Department of Labor and Workforce Development said. The peninsula had 18,820 wage-and-salary jobs in October, down from 20,056 in September and down from 18,898 in October last year.
Statewide unemployment in October was 5.5 percent, up from 5 percent in September but down from 5.7 percent in October last year. The Alaska economy lost jobs in October from all sectors except government and finance, labor officials said. The biggest losses were in seafood processing, tourism and transportation. Construction also lost jobs as road-building slowed.
Tesoro names new board member
Tesoro Petroleum Co. has selected Sean O'Keefe to fill a newly created seat on its board of directors. O'Keefe will hold the seat until the 2001 annual stockholder meeting or until his successor is duly elected and qualified. He is a professor of business and government policy at Syracuse University in New York.
Homer chamber seeks award nominations
The Homer Chamber of Commerce seeks nominations for its annual Citizen of the Year and Outstanding Community Service by a Business awards.
The Citizen of the Year award recognizes public service with a variety of organizations and causes that benefit the community. The Outstanding Community Service by a Business award recognizes support of community activities and organizations beyond what normally would be expected from a business.
Nomination forms are available from the chamber and city offices and many area businesses. Nominations will go to a public vote in January. The chamber will announce the winners on Jan. 26. For information, call 235-7740.
Alliance names new general manager
Larry Houle is the new general manager of the Alaska Support Industry Alliance.
Houle has 20 years of private- and public-sector experience. He recently spent two and a half years as executive director of the Heritage Land Bank in Anchorage. Before that, he held executive marketing and operations positions with Alaska communications, transportation and real estate companies. He has worked closely with local, state and national government on issues key to the growth of Alaska's economy and infrastructure.
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