PHILADELPHIA — Sunoco said Thursday its CEO will step down on March 1 as the company exits the refining business to focus on its pipelines and retail gas stations.
Lynn L. Elsenhans will be replaced by the company’s chief financial officer, Brian P. MacDonald.
Sunoco announced the move Thursday as it reported a net loss of $660 million before taxes for the fourth quarter.
It also gave details about its exit from the refining business, saying it will create a $250 million insurance fund to handle environmental problems at the refineries.
The Philadelphia company said it will also buy back up to 19.9 percent of its stock, raise its quarterly dividend by 33 percent, and repurchase up to $400 million in debt.
It also plans to make an $80 million contribution to its pension fund to defer any additional contributions “for the foreseeable future,” and to eliminate future retiree medical costs by contributing $200 million to a special trust fund.
Sunoco’s shares, which fell 15 cents in regular trading to $38.25, gained 91 cents, or 2.4 percent, to $39.16 in extended trading after the news.
Elsenhans said on a conference call with investors that she told the board, “I was no longer the right person to lead Sunoco.”
She became the company’s first female CEO in 2008, coming from Royal Dutch Shell PLC. Sunoco noted that during her tenure she oversaw the sale of its heating oil and chemical businesses, the spin-off of SunCoke Energy, and the exit of the refining business, representing two-thirds of Sunoco’s assets.
The outgoing CEO will remain chairman until the annual shareholder meeting in May, when MacDonald, 46, will also assume that title.
Weak demand for gasoline and a glut of refining capacity has meant low profit margins for refiners. Sunoco also has to pay more for some of its supply of crude oil than rivals such as Marathon Petroleum Corp., which have refineries in the middle of the country and get cheaper, West Texas Intermediate crude.
Sunoco has been trying to sell its Philadelphia and Marcus Hook, Pa., refineries and has contacted about 150 potential buyers, from oil companies to private equity firms, Elsenhans said. She said there was some interest in the Philadelphia refinery, but that if it can’t be sold, it will be idled by July. The Marcus Hook refinery is already being powered down.
Sunoco said the $660 million fourth-quarter loss before taxes compared with a pretax gain of $119 million a year earlier.
Excluding special items, the company said it would have a pretax loss of $48 million.
The company said the figures were preliminary and income tax amounts were not yet final.
It expects to report full results after taxes next week.
The logistics and retail businesses that the company plans to keep had pretax income of $106 million, while refining and supply had a pretax loss of $117 million.
Thank God!!!! Too bad its after the fact she single handly dismantled a once great company. Good riddance
She cut costs at a bloated bureaucracy , got rid of the money-losing refining business, grew the logistics business, and makes the investors happy. And tom laments the dismantling of a once great company? Get over it! And cash your dividend!
well J W Melon balls its obvious your not a blue collar working man that lost his job to corporate greed. Go cash your dividend check. Its people like you why this country is in the shape it is. All you want to do is turn a quick buck and screw anyone who gets in the way. Back when this country was strong people invested in the company for the long term and owners actually cared about their workers!
Cut costs? are you kidding me she cut profitable business? Why is it the she wont talk about the 10 years before the last 8 quarters when the company made billions and instead of reinvesting into the refineries to make them profitable when the cylcial business that downstream is would downturn like it has and gas cracks droppping. If the board would have reinvested into its own company instead of buying back shares for the shareholders maybe just maybe the refinering business would be profitable in a tough time like now a days. The toledo refinery was profitable it runs on wti crude much cheaper than east coast brent crude but she sold it. The chemical business was profitable but she sold it. The measley 30 cent per share divided i give it back in a heartbeat if it kept ppls jobs. So thats why i lament about sunoco. MR melon
The company went to crap when they divested the upstream assets–currently the most profitable sector of any integrated U.S. energy company. Ms. Elsehans is just amotther Ivy League undertaker selling off body parts and getting paid $12MM/year in the process. Another fine example of short sided American business strategy.
Funny nothing said of the sales of the tulsa and toledo refineries. I believe the toledo refinery made in a month what sunocos refining lost over the year. Funny when you want out of refining and you sell the money maker you can make silly claims that there is no money in refineing