AP
Petro-Canada profit surges 77 pct higher
Thursday July 24, 2:53 pm ET
Petro-Canada profit surges 77 percent higher to $1.49B in quarter


CALGARY, Alberta (AP) -- Canadian oil and gas company Petro-Canada reported Thursday that its second-quarter earnings surged 77 percent higher from a year ago.

The integrated oil company said its April-June net income was just under $1.5 billion Canadian dollars ($1.49 billion), or C$3.10 ($3.07) per share, up from C$845 million ($838 million) or C$1.71 ($1.69) per share in the year-earlier period.

With operating profit rising 43 percent to $1.15 billion Canadian dollars, Chief Executive Ron Brenneman told analysts that it was "another strong quarter, both operationally and financially."

Brenneman said a healthy boost to upstream, or oil-producing operations, came from record-breaking crude prices and a rebound in natural gas.

But he added that the refining business was much tougher, with its downstream operating earnings coming in at zero, down by $249 million Canadian dollars ($245 million) over the same quarter in 2007 as margins tightened in the distribution and retailing business.

Petro-Canada's fuel-selling business maintained its No. 1 market share position in the urban retail market despite easing in demand from both retail and wholesale customers in response to higher prices.

"The falloff in demand is putting a lot of downward pressure on gasoline margins. But distillate margins are holding up reasonably well, so we're running our refineries to preferentially produce diesel."

On the plus side of the ledger, Petro-Canada booked higher operating earnings from North American natural gas, the oilsands, East Coast Canada operations and international assets.

The company said its full-year production forecasts were boosted slightly to between 400,000 and 420,000 barrels of oil equivalent per day, up from a previous estimate of 390,000 to 420,000 barrels per day.

Petro-Canada shares fell 21 Canadian cents to C$46.39 ($45.8) by midafternoon trading on the Toronto Stock Exchange.