Tesoro Corp., the Texas-based oil refiner whose Kapolei refinery is Hawai'i's largest, said it swung to a first-quarter loss of $82 million from a $116 million profit a year earlier as gross refining margins fell.

The company said there were declining margins for gasoline, fuel oil, asphalt and petroleum coke and announced it is undertaking cost initiatives that include reducing operations and administration costs along with capital expenditures.

The loss of 60 cents a share was greater than analysts' average estimates and compared with a profit of 84 cents a share a year earlier. Tesoro operates seven refineries nationwide as well as retail gasoline stations in Hawai'i.

The company's margins were hurt by its Hawai'i refinery operations, which ran at a lower production rate as the company upgraded equipment and dealt with a power failure and fire that temporarily disabled the Campbell Industrial Park refinery during the quarter.

Tesoro reported the refinery here produced 69,000 barrels of gasoline, jet fuel, diesel and other products daily, or 16,000 barrels less than it did during the January-March period of 2007.

At the same time the plant's gross refining margins were negative.

Tesoro reported it is making progress with several initiatives to improve the profitability of the Hawai'i refinery. Some of these are aimed at reducing reliance on light sweet crude from Asia and getting better value for its production.