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Holly Corp. posts 53 percent drop in 3Q profit

DALLAS (AP) - Independent petroleum refiner Holly Corp. said Thursday its third-quarter profit fell 53 percent because of lower gas prices and reduced refinery margins industrywide.

For the three months ended Sept. 30, net income after paying preferred dividends was $23.5 million, or 47 cents per share, down from $49.9 million, or $1 per share, in the 2008 period.

Revenue fell 12 percent to $1.49 billion from $1.64 billion last year. Holly Corp. said the decrease was due to a 42 percent year-over-year decline in prices of produced refined products, partially offset by a 63 percent rise in volume.

Analysts polled by Thomson Reuters, on average, expected Holly to post profit of 45 cents per share, on revenue of $1.38 billion.

Overall refinery gross margins for the quarter were $8.27 per produced barrel, a 45 percent drop from $15.17 in the third quarter of 2008.

Holly said refinery production levels increased 79 percent, in part due to production from a newly acquired Tulsa, Okla., refinery and gains capacity expansions at two other sides. The company said its recently announced plans to purchase a second Tulsa refinery and combine it with the one it already owns will enable it to increase overall capacity and save about $125 million in capital costs.

Holly Corp. shares closed Thursday up 7 cents at $28.71.

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