Enon-based Speedway hits near record earnings of $239M

Marathon Petroleum Corp. reported $515 million in earnings in the second quarter this year, a significant drop compared to the same time last year despite near record income from the company’s Speedway segment — one of Clark County’s biggest employers.

Company officials said Thursday they continue to study a proposal to spin off the Enon-based convenience store chain, part of a series of moves company leaders have said are intended to create more value for shareholders. Speedway reported $239 million in income for the second quarter this year, which company officials said was the third highest quarter the segment has had.

RELATED:Speedway adds jobs, moves forward one year after $2.8B Hess deal

It was also a record for the second quarter for the segment, eclipsing a previous record set last year by $46 million.

“Speedway delivered another exceptional quarter,” Heminger said. “We expect to continue driving marketing enhancement opportunities as we build new stores, remodel stores and rebuild existing locations across our network.”

Speedway’s corporate headquarters is based in Enon and it has about 1,350 workers locally and about 33,820 nationally.

The gains were attributed to higher light-product and merchandise gross margins in the quarter.

MORE: Enon-based Speedway finalizes deal with Hess

Marathon’s second-quarter earnings of $515 million were down about 36 percent compared to the same quarter last year, when the company reported earnings of $801 million.

Company officials said Thursday they expect a decision on whether to spin off the Speedway brand into a separate company before the end of the third quarter this year but declined to provide further details. In a conference call with analysts Thursday, Heminger said Marathon continues to work with an independent financial adviser to review how a potential spinoff might affect the company and the retail chain.

More research on the issue is needed before a final decision is announced, he said.

“You have to have a vision for how the company could compete and what its balance sheet would look like,” Heminger told analysts.

DETAILS: Speedway signs deal with travel plaza giant

Heminger declined to answer further questions from analysts about the possibility of spinning off the Speedway chain, saying it’s still too early to provide an idea which way the company is leaning toward.

“When we make that decision, we don’t want our investors to lean one way,” he said.

In 2014, Speedway completed a $2.8 billion acquisition of Hess Retail Holdings, an East Coast convenience store chain. Speedway already operated about 1,500 stores across the U.S., mostly in Midwestern states like Ohio, Indiana and Michigan.

The acquisition allowed the business to take control of 1,260 Hess locations, making Speedway one of the largest convenience store chains in the country.

In addition to other factors, Speedway’s segment results also benefited from a joint agreement last year with PILOT Flying J, according to information from the company Thursday. Under that agreement, which started in the fourth quarter last year, the companies agreed to form a new entity called PFJ Southeast.

The joint venture included 41 Speedway locations and 79 locations contributed by Flying Pilot J. The 41 Speedway locations were renovated and re-branded as either Pilot or Flying J stations, although company officials have previously said the deal isn’t expected to impact customers in Ohio.

READ MORE: Marathon reports earnings up in first quarter

The Springfield News-Sun has provided extensive coverage of Speedway and its economic impact on Clark County. The paper has produced award-winning coverage of the company’s acquisition of the Hess retail chain and extensive coverage of its impact on Enon and Springfield.

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