Gas prices earn profit for Crown


Higher gasoline prices gave Crown Central Petroleum Corp. its first quarterly profit in more than a year, the Baltimore-based gasoline refiner and marketer announced yesterday.

Company officials and industry analysts alike said they were delighted with Crown's earnings of $7 million on sales of $483 million in the three months that ended June 30, an improvement over last year's second-quarter loss of $7.3 million on sales of $453 million.

But they cautioned that the good news is not necessarily the long-awaited sign of a turnaround for a company that has reported annual losses for the last four years.

"They are doing the right things, but whether this is the turnaround they've promised for a long time or not -- who can tell?" said Kurt Funderburg, who follows Crown for Ferris, Baker Watts Inc. in Baltimore.

"We are pleased and we hope it continues," said company spokesman Joseph Coale. The company, which has been restructuring to lower its costs, "is seeing a lot of things come together," he said.

The company's two refineries have been operating well, and Crown bought 15 more gasoline stations, bringing its total to 332, in order to sell a higher share of the gasoline it makes.

But the gas market may undercut the company's progress, Mr. Coale said.

So far this month -- the first in the third quarter -- oil industry profit margins have slipped.

"We're optimistic about the third quarter," because prices have, so far, remained generally above Crown's break-even point, Mr. Coale said.

But, he warned, prices and profits may fall further. "It is a very volatile market and we never take anything for granted."

For the first six months of the year, Crown lost $3.1 million on sales of $929 million.

The company attributed the loss to a $3.2 million charge in the first quarter for early retirement of debt.

In the first six months of last year, Crown made $1.4 million on revenues of $847 million.

While Crown's profit is a good sign, almost all oil companies did well in the second quarter because of the high pump prices, Mr. Funderburg said.

Alvin Silber, who follows the oil industry for Herzog, Heine, Geduld in New York, said oil companies usually make money each spring because they are supplying gasoline for the summer driving season.

"They've already sold the gasoline for the driving season," he said. "They should now be working on [supplies for] the winter season," in which customers usually see lower prices, and oil companies usually see lower profits, he said.

Crown's stock rose on yesterday's news. The controlling "A" shares, which are mostly held by company chairman Henry A. Rosenberg and his family, rose 50 cents to $16.50 in Amex trading. The "B" shares also closed up 50 cents to $16.125.

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