Three companies representing three distinct areas of the oil business have reported earnings and the surprise to many will be that the refiner put up the best numbers. Western Refining Inc. (NYSE:WNR) reported EPS of $0.86, way up from a net loss of $-0.60 in the same period a year ago, and above a consensus estimate of $0.84. Revenues did not keep pace though. Western’s sales came in at $1.37 billion, compared with $2.55 billion a year ago, and consensus estimates of $2.96 billion.

Devon Energy Inc. reported a net loss for the first quarter of $4.0 billion (EPS loss of -$8.92) following a non-cash after-tax drop in the carrying value of its oil and gas properties. Foster Wheeler AG (NASDAQ:FWLT), an oilfield construction and services firm, posted a first quarter GAAP EPS of $0.57, substantially lower than the $0.95 EPS it showed a year ago and about 16% below analysts’ estimates of $0.68.

Devon posted total revenues of $2.03 billion for the first quarter, down almost 32% from 2008 first quarter revenue of $2.98 billion. The company’s revenues beat estimates of $1.84 billion, and, excluding the reduction in carrying value and other items, the company’s EPS for the first quarter of 2009 totaled $0.48, 42% better than estimates of $0.28. Foster Wheeler’s revenues for the quarter equaled $1.26 billion, down from $1.8 billion a year ago, and short of estimates of $1.51 billion.

Neither Devon nor Foster Wheeler had any comments on 2009 guidance in their earnings releases. Western’s CEO noted that the company is “cautiously optimistic in our outlook for margins as a result of inventory draws, increased gasoline demand, and continued low refinery utilization rates.”

Even though crude prices have improved to above $50/barrel, that is not enough for an E&P company like Devon to show the kind of profits posted in 2006, 2007, and the first half of last year. Even production increases (Devon was up 7% in production) can’t offset low prices for crude.

Foster Wheeler is captive to capital spending by both E&P and refining companies. Orders for its Global Power business fell from $533 million in the first quarter of 2008 to just $93 million in the same period this year. That result was offset by the booking of an engineering, procurement, and construction contract to build a new refinery in India.

Western Refining benefited from low crude prices and reduces operating costs because its refineries were not running at anywhere near full capacity. Western has also turned to lower cost, heavier crude for processing, further reducing its costs and improving its margins.

Western is up more than 8% in pre-market trading this morning, to $15.00/share. The company’s 52-week range is $4.50-$17.23. Devon is up more than 3%, to $56.30. Devon’s 52-week range is $38.55-$127.43. Foster Wheeler is down nearly 7%, to $22.44. The company’s 52-week range is  $12.73-$79.97.

Paul Ausick
May 6, 2009

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