Gasoline retailer’s 2Q net off 36%
Cost rise a factor at Murphy USA
Murphy USA Inc.’s second-quarter profit fell 36% compared with the same quarter a year ago, the El Dorado company reported Wednesday after the stock market closed. It attributed the drop to a lower contribution from fuel sales along with higher operating costs, which were only partly offset by increased merchandise sales.
The gasoline and convenience-store chain reported net income of $32.7 million, or $1.01 per share, for the quarter that ended June 30, compared with $51.8 million, or $1.58 per share, a year ago. Per-share earnings missed the average estimate of $1.08 by five analysts surveyed by Thomson Reuters. Revenue remained flat at $3.8 billion.
Retail gasoline sales grew 5.9% over the same quarter last year, while the volume of fuel sold at stores open at least a year increased 3.7%. However, lower product prices created timing and inventory adjustments, the company said in a release.
Higher merchandise sales throughout the chain and strong performance at new stores helped push the contribution from merchandise sales up 3.1% to $105.5 million. Tobacco sales accounted for most of the
growth.
Andrew Clyde, Murphy USA’s president and chief executive officer, said in the release that the company “invested in multiple areas of the business to acquire customers and drive traffic to our stores, resulting in share gains in our most important categories.” He noted that same-store volume of fuel sold rose for the fourth-consecutive quarter.
Clyde also announced that the board of directors has approved a repurchase of up to $400 million shares of the company’s stock through July 2021 “based on our view of the potential of the business and our ability to increase future organic growth through operating cash flows.”
The company repurchased about 203,000 common shares during the second quarter for $16.8 million.
Murphy USA shares rose $1.79, or 2%, to close Wednesday at $88.36 on the New York Stock Exchange. The shares have traded between $69.98 and $88.58 in the past year.
Company executives will discuss second-quarter results in a conference call at 10 a.m. today. It can be accessed by dialing (844) 613-1037 and using the conference number 2789613. It also will be webcast live on the Investor Relations page of Murphy USA’s website. The webcast will be available for replay one hour after the conference call ends.
Murphy USA opened one new retail location in the quarter, and now operates 1,474 stations in 26 states, mainly in the Southeast, Southwest and Midwest. Eighteen stores are currently under construction, including 12 kiosks being razed and rebuilt. These will reopen as 1,400-square-foot stores in the third and fourth quarters.