Murphy USA logs loss, tops forecasts

Graphs showing Murphy USA Inc. third quarter information.
Graphs showing Murphy USA Inc. third quarter information.

Murphy USA Inc. on Wednesday reported a third-quarter profit of $66.9 million, down 3% from the same quarter a year ago.

Earnings per share was $2.27, up from $2.18, partly because of recent share buybacks. But total revenue fell to $2.8 billion in the three months that ended Sept. 30, down about 25% from the same period last year.

Overall results beat analysts' expectations.

The retailer of fuel and convenience merchandise has 1,488 stores, consisting of 1,151 Murphy USA sites and 337 Murphy Express sites. A total of 27 stores are under construction in efforts to reach the El Dorado company's goal of operating more than 1,500 stores by the end of the year.

Andrew Clyde, Murphy USA's president and chief executive, said in a report released after the stock market closed that the company had strong results from improved customer foot traffic, including sales growth in key merchandise categories and higher fuel margins.

"These trends have continued into October where traffic continues to rebound and same store fuel gallons have recovered to 94% of prior year," Clyde said. "As we begin to put 2020 in the rear view mirror, we are excited about our accelerated 2021 growth plans."

Part of those plans include Murphy USA's updated capital allocation strategy announced Wednesday, which allows stock repurchases of up to $500 million after its current $400 million authorization is met. The company said that it wants to complete the buybacks by the end of 2023.

Despite industry head winds from the coronavirus pandemic, adjusted third-quarter results surpassed analyst estimates. A FactSet consensus of analysts expected $2.28. Stephens Inc. expected $2.49. Instead Murphy USA reported adjusted earnings per share of $2.53.

Ben Bienvenu, a Stephens analyst, commended the retailer for its ability pursue new store builds and mergers and acquisition opportunities.

Total sale of retail fuel gallons decreased 11.9% in the third quarter compared with last year, and same store sales decreased by 12.7%. Retail fuel margins rose 11% to 22.3 cents per gallon from a year ago.

Merchandise sales grew 6.2% to $118.1 million, with average unit margins of 15.6%, the company said. This came in part from increased tobacco and lottery ticket sales compared with the same quarter last year.

Total 2020 operating expenses were flat with last year's expenses. Selling, general and administrative expenses were $17.7 million higher, however, because of a $10 million charitable contribution and increased employee-related costs.

Murphy USA also repurchased 700,000 shares for $89.9 million during the quarter at an average price per share of $136.98. The company is carrying $963.2 million in debt as of Sept. 30 and has a cash balance of $317.5 million.

During the quarter four new stores opened and five were razed and rebuilt. One store closed. In October, Murphy USA said it opened one new store and six were razed and rebuilt.

Company shares fell less than 1%, or 92 cents, to close Wednesday at $123.50 on the New York Stock Exchange.

Murphy USA is hosting a conference call with analysts to discuss the results at 10 a.m. today. Callers can dial (833) 968-2218 , ID number 4728178 to listen-in. The conference is also accessible via webcast at ir.corporate.murphyusa.com.

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