Sunoco CEO Says Acquisition Was 'Appropriate Next Step'
PHILADELPHIA – Before Sunoco Inc. CEO Brian MacDonald discussed the company’s 2012 fiscal first-quarter earnings during a conference call today, he followed up on Monday's announcement that the company would be purchased by Energy Transfer Partners LP (ETP) for $5.3 billion.
"We are very excited to join forces with ETP. This was the appropriate next step for Sunoco," he said. "This transaction will significantly expand and diversify our business and deliver unique synergies and benefits. We also believe our shareholders are receiving an attractive premium for their shares."
During a question-and-answer session following his prepared remarks, MacDonald deflected analyst questions about whether Sunoco considered any other offers to purchase the company. He did say, however, that much more information regarding that topic will be provided in a future proxy statement.
Sunoco’s retail marketing division lost $6 million in its 2012 fiscal first quarter, compared to a profit of $12 million for the same time period in 2011.
"The retail division was challenged by rapidly rising gasoline prices," MacDonald noted during the investor conference call. "But the retail business continues to deliver durable margins and cash flows."
Much of the loss was attributed to a 2.1-percent decline in same-store gasoline sales at Sunoco’s convenience store locations.
However, MacDonald added that the retail division, parent of the company's APlus Convenience Stores, performed much better in April because gas prices began to retreat.
As for the entire company, Sunoco reported a loss of $53 million during its fiscal first quarter, which ended on March 31. If including one-time items, Sunoco achieved a net profit of $248 million in its latest quarter. The Philadelphia-based company lost $121 million during its 2011 fiscal first quarter.