The overall weaker first-quarter net earnings could be traced to weaker performance in its marketing segment, which was impacted by lower fuel sales due to unusually rainy winter weather in California. Its refining and logistics segments turned in year-on-year earnings increases.

Consolidated net earnings were $87 million for the first quarter 2017 compared to $109 million for the same period last year. EBITDA for the first quarter 2017 was $423 million compared to $411 million last year. First quarter 2017 results included pre-tax costs associated with acquisitions of $19 million.

First quarter 2016 results include a pre-tax loss of $147 million related to a lower of cost or market (LCM) inventory adjustment in the Refining segment.

Greg Goff, Tesoro’s CEO, said that severe weather across its business and a crude oil pipeline outage in Salt Lake City had combined had an impact of approximately $40 million pre-tax.

Refining segment operating income was $34 million for the first quarter 2017 compared to an operating loss of $93 million in 2016. Segment EBITDA was $181 million compared to $53 million in 2016. First quarter 2016 segment operating income and segment EBITDA included a pre-tax loss of $147 million related to a LCM inventory adjustment. The refining gross margin for the company’s Salt Lake City refinery was negatively impacted by a weather related crude oil pipeline disruption.

Logistics segment operating income increased to $150 million in the first quarter 2017 from $119 million a year ago and segment EBITDA increased to $210 million from $175 million last year. Results include approximately $3 million of acquisition costs related to TLLP’s North Dakota Gathering and Processing Assets acquisition which closed on January 1, 2017.

The performance of Tesoro Logistics LP was driven by contributions from the acquisitions of the North Dakota Gathering and Processing Assets, the Northern California Terminalling and Storage Assets completed in the fourth quarter 2016 and the Alaska Storage and Terminalling assets in the third quarter 2016. Results were partially offset by volume softness in the natural gas gathering and processing business due to production declines in the Rockies.

Marketing segment operating income was $133 million, segment EBITDA was $146 million and fuel margins were 9.6 cents per gallon in the first quarter 2017. This compares to operating income of $227 million, segment EBITDA of $239 million and fuel margins of 13.9 cents per gallon last year.

Performance in the quarter was negatively impacted by lower fuel sales due to an abnormally rainy winter in California, partially offset by lower operating expenses. Tesoro continued to grow its branded station network by 3% to 2,513 with the addition of 77 stations over the last 12 months.

Tesoro said that the acquisition of Western Refining is on track to close in the second quarter.

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