Murphy USA Lowers Guidance After Preliminary 1Q Loss of $3M

by Kyle Massey  on Tuesday, Apr. 18, 2017 4:26 pm  

Andrew Clyde

Murphy USA Inc. announced a preliminary first-quarter loss of $3 million in a filing with the Securities & Exchange Commission on Tuesday afternoon, results bad enough to lead the El Dorado gasoline retail giant to revise its investor guidance numbers downward for all of 2017.

In a news release, the company said it rarely discusses full-year guidance on a quarterly basis, but "weaker-than-expected first-quarter results will reduce the likelihood of achieving" a profit of $140 million to $190 million that the company expected when it filed its fourth-quarter and full-year guidance expectations on Feb. 1.

The company's new 2017 guidance predicts a full-year profit of $90 million to $160 million, a shortfall of at least $30 million from the February full-year guidance. The company blamed unfavorable market conditions leading to soft retail fuel volumes and lackluster results from its product supply and wholesale activities. 

"These market factors include, but are not limited to, record-high gasoline inventories, subdued retail demand and discounted pipeline space volumes," the news release said.

The company, which operates about 1,400 gasoline and convenience locations in 26 states, said it expects market fundamentals to return to a "more normalized state" later in the year, and pointed out that previous first quarters have been among Murphy USA's worst since the company was spun off from Murphy Oil Corp. in 2013, even in years when profits substantially rebounded.

"The first quarter is typically a period of lower earnings for the company, but a variety of market conditions along with regulatory and political events have converged that will result in short-term underperformance," said President and CEO Andrew Clyde. "In our history, we have weathered a wide variety of challenging market conditions, which eventually experience mean reversion and we expect that this year will be no different. 

"While we don't expect discussions around guidance on a quarterly basis going forward, we are prudently level-setting expectations to maintain transparency with investors and affirm our commitment to long-term value creation for shareholders."

Separately, the company announced that Daryl Schofield will join the company as executive vice president of fuels, effective May 3. Schofield will oversee the entire fuels value chain and fuels organization for Murphy USA, the company said. 

Schofield will join the company from Tesoro Corp. of San Antonio, Texas, where he was senior vice president of commercial business.

Murphy USA's annual stockholders' meeting is scheduled at 1:30 p.m. May 4 at the South Arkansas Arts Center in El Dorado.



Please read our comments policy before commenting.