Tesoro Corp. (TSO) posted third-quarter net income of $345 million, up from $56 million a year earlier, becoming the latest refiner to reach pre-recession earnings levels.

Tesoro credited the earnings growth to increased activity at its refineries and its access to discounted crude oil in the mid-continent region and West Coast. New drilling technology increased oil production in the Midwest, depressing U.S. benchmark oil prices, while refiners such as Tesoro have also started using more lower-quality, and therefore discounted, crude oil types.

Tesoro reported a profit of $2.39 a share, up from 39 cents a share a year earlier, and its best showing since the second quarter of 2007. Revenue rose 52% to $8.1 billion. Analysts surveyed by Thomson Reuters expected earnings of $1.99 a share on revenue of $7.78 billion.

By buying discounted crude and selling the finished fuel at prices closer to that charged by higher-cost competitors, Tesoro was able to boost gross refining margins to $18.43 a barrel, up from $13.28 a year earlier. The company also boosted the average throughput at its seven refineries to 92% of capacity, the highest level in three years.

Tesoro was also the only major independent refinery to report higher fuel-sales volumes for the quarter. Same-store fuel sales grew by 1%, compared to sales declines reported by Marathon Petroleum Corp. (MPC) and Valero Energy Corp. (VLO). Overall fuel-sales volumes rose 16% after the company in September bought an additional 290 gas stations, boosting the number of retail locations it supplies to 1,200.

Tesoro share were up 3.55% to $28.00 after hours, they closed up 5.7% during the regular session.

-By Ben Lefebvre, Dow Jones Newswires; 713-547-9201; ben.lefebvre@dowjones.com

--Nathalie Tadena contributed to this article.

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