Murphy Oil Still on the Fence About Retail Spinoff

by Luke Jones  on Friday, Aug. 3, 2012 11:19 am  

Murphy Oil Corp. of El Dorado is still considering spinning off its retail arm, Murphy USA, but has yet to reach a final decision, according to a conference call conducted with analysts on Thursday.

During the call, CEO Steven Cosse said the retail business is underperforming and might function better on its own.

"The question remains whether it stays part of Murphy or whether it continues its growth as a standalone, held directly by Murphy's shareholders," Cosse said. "And that's the decision to be made, but before we get to that decision, I have to say that we have to understand and address some of its underperformance it sustained here recently."

Cosse did not elaborate, except to say that while the retail arm had strong margins, it "sort of underperformed the competition."

According to the company's second-quarter earnings on Wednesday, Murphy Oil's (NYSE: MUR) refining and marketing arm, which includes Murphy USA, increased from $60.1 million in the second quarter of 2011 to $80.5 million in second quarter of 2012.


Murphy Oil has been considering spinning off Murphy USA, the wholly owned retail subsidiary that has piggybacked on Wal-Mart locations, since at least late last year.

Murphy USA generates almost half of Murphy's total revenue and sells 2.6 percent of the country's total retail gasoline. Analysts have said it's been one of Murphy's most successful ventures.




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