Frontier Oil 1Q profit falls partly on lower refining margin

HOUSTON—Frontier Oil Corp. said Wednesday its first-quarter profit fell as rising crude prices squeezed refining margins and the oil refiner took one of its facilities off-line for maintenance. A large inventory gain helped keep the company from posting a loss.

Earnings fell to $46 million, or 44 cents per share, from $74.7 million, or 68 cents per share, during the same period a year earlier.

The most recent figure included an inventory gain of about $62.5 million, or 60 cents per share, up sharply from a similar gain of $2 million, or 2 cents per share, a year earlier. The 2008 figure also includes a hedging loss of $16.8 million, or 16 cents per share, compared with a loss of $1.4 million, or 1 cent per share, for the first quarter of 2007.

Analysts expected the company would earn 12 cents per share, on average, according to a survey by Thomson Financial. Those figures typically exclude one-time adjustments.

Revenue rose to $1.19 billion from $1.05 billion, topping analysts' average estimate of $1.15 billion.

Frontier took its refinery in El Dorado, Kan. out of service in March to install a new vacuum tower. The 39-day downtime lowered the company's production to 126,018 barrels per day, down from 166,529 a year earlier.

Soaring oil prices cut the margin for turning oil into gasoline down to less than a third of the year-earlier level. Diesel margins dipped modestly.

Frontier shares rose $1.47, or 5.6 percent, to $27.98 in morning trading.