The company, which on March 25 announced plans to be bought by Shell Oil Products U.S., had net income of $21 million, or 26 cents per share, for the period ended March 31, up from $8.3 million, or 11 cents per share, during the first quarter of 2001. (Net income equals operating income for all segments minus corporate administrative expenses and interest charges.) Management attributed the improvement to better market conditions, normalized motor oil margins and strong performance by the Excel Paralubes joint venture.
The automotive consumer products marketer reported improved financial performance in all segments. Operating income for the Lubricants segment jumped 40 percent to $43.8 million, thanks to strong cost performance, as well as better margins. In addition, sales of branded motor oils increased, while sales of lower margin products decreased.
Operating income from the International segment grew from $1.2 million to $3.5 million, despite an 11.3 percent drop in revenue. Officials said the segment benefited from a restructuring plan that scaled back low margin operations, facilities and distribution channels. Operating income for Jiffy Lube International, which is not part of the International segment, jumped 64.6 percent to $8.2 million due to strong cost performance and a 6.4 percent hike in comparable store sales.
Supply Chain Investments, which consists primarily of the Excel Paralubes base oil refining partnership with Conoco, had operating income of $16.5 million during the first quarter, up from $9.7 million a year earlier. Revenue dropped 4.1 percent due to lower base oil prices, but this was more than offset by increased production and a change in turnaround expense accruals.
Pennzoil-Quaker State and Shell say they expect their deal to be completed during the second half of this year. Pennzoil-Quaker States earnings report indicates that the company is already focusing on the union. Despite the glowing numbers, a news release about the results included no comments about them. Instead, President and Chief Executive Officer Jim Postl said the acquisition is progressing and restated the benefits that management sees from it.