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Second Quarter Brings Good News to 7-Eleven, BP

DALLAS -- 7-Eleven Inc. on Tuesday said its second-quarter earnings grew 22 percent, boosted by a surge in gas and merchandise sales.

The Dallas-based convenience store operator reported second-quarter net income of $57.2 million, compared to second-quarter 2004 net income of $47 million.

The company's revenue climbed 9.1 percent to $3.4 billion from $3.1 billion in 2004's second quarter, 7-Eleven reported.

Gas sales were up 14.6 percent to $1.25 billion from $1.09 billion in the same period of 2004. The average cost per gallon of gasoline increased to $2.22 compared to $1.95 a year ago.

Merchandise sales grew 6.5 percent to $2.2 billion, fueled by a 5 percent increase in same-store merchandise sales, or sales of merchandise at stores open at least one year. The company reported merchandise sales in 2004 of $2 billion.

“At 7-Eleven, we are committed to keeping pace with the changing needs and demands of convenience customers,” said Jim Keyes, 7-Eleven's president and CEO. “By executing our merchandising strategy, we have delivered 35 consecutive quarters of increased U.S. same-store merchandise sales.”

As for BP Group plc, one of the world's largest oil companies, second-quarter profit rose 29 percent on the strength of world oil prices, but the company said it was taking a $700 million charge to settle claims from the Texas City, Texas, refinery explosion on March 23 that killed 15 workers.

According to the Associated Press, CEO John Browne said the $700 million figure included $127 million for the settlement of claims related to the deaths and serious injuries and a provision of $573 million for estimated future costs.

Net profit came to $5.66 billion for the three months ended June 30, up from $4.38 billion in the second quarter of 2004. Revenue jumped to $88 billion from $71.1 billion.

BP is the first major oil company to report its second-quarter results. Royal Dutch Shell plc and Exxon Mobil Corp. are both expected to post strong earnings Thursday because of oil prices that remain near record highs.

"The financial highlights have, of course, been magnified by the external environment," Browne said. "But they couldn't have been delivered without the investments and improvements which have been made over the past decade."

Browne said that oil prices are likely to average around $40 a barrel over the next few years.

"We continue to say that oil prices in the medium term will be pretty strong," he said. "Whether they stay at this level remains to be seen because of the lack of production capacity and the lag, the time it takes to get that production ready for the market."

Browne warned it was not certain that the second six months would be as profitable as the first half of 2005.

"The outlook for retail margins remains uncertain with continuing crude and product price volatility," he said. "Rising product prices have dampened margins over the past few weeks and have contributed to a weak start to the third quarter."

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