Ultramar Will Cut Jobs, Shed 300 Gas Stations

Oil refiner and retailer Ultramar Diamond Shamrock Corp. said on Tuesday that it will cut 466 jobs and sell or close about 300 gasoline station-convenience stores that aren’t meeting profit targets to boost earnings as gasoline prices decline.

The company will take a second-quarter charge of about $78 million, or 86 cents a diluted share, which may result in a loss for the period.

The cuts are expected to boost profit by $60 million, or 66 cents a share after taxes, next year. The action comes as an oversupply of gasoline and new competitors have pushed down prices, making it harder for many smaller stations to turn a profit, analysts said.

The stations to be closed represent about 14% of its total of 2,300, said Ultramar, which also owns seven refineries. Most of its stations are in Texas, Colorado, Michigan and California, the company said.

It was not immediately known how many, if any, California stations would be closed.

Ultramar Diamond Shamrock shares rose 19 cents to close at $31.75 on the New York Stock Exchange.