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Second-quarter net profits dropped significantly from $243.8 million last year to $59.3 million, or 57 cents per diluted share, this quarter.
Net income from January to June 2008 decreased 67 percent to $105.3 million from $318.5 million during the same time frame last year.
The weakening national economy and the effect record high crude oil prices had on gasoline demand caused the decreases.
"I hate to lay it all on the high crude price, but that is the cover," Frontier Oil Corp. Chairman, President and CEO James Gibbs said. "There is a longer-term demand, and we are beginning to see it."
Frontier's gasoline crack spread improved slightly to $5.03 per barrel for the second quarter of 2008, compared to $4.04 for the first quarter. However, this is nearly an 86 percent drop from the cost of a barrel in the second quarter of 2007.
"The second quarter presented a challenging economic environment for the refining sector," Gibbs said in a news release. "The price of crude oil had doubled over the past year, and gasoline demand continues to soften in a season which typically experiences strong gasoline demand."
Gibbs also cited the decrease in margins from byproducts, such as asphalt and kerosene, as sales prices for these products only slightly increased compared to the increase in crude prices.
Additionally, he said, total production of barrels decreased slightly last quarter due to a number of planned refinery projects in both Cheyenne and El Dorado, Kan.
"For the third quarter, total crude throughput is expected to average approximately 152,200 barrels per day due to the margin environment and a 10-day planned outage of the coker unit at El Dorado," a company news release said.
Frontier generated $146.1 million in cash flow from operations for April, May and June.
Despite the decrease in profits, Gibbs is staying positive.
"The outlook is better," he said. "Oil prices will definitely help us and the industry in the long run.
"I think the second half of the year is going to be better than the first half."
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