Murphy USA Inc. of El Dorado on Wednesday reported a slight decline in third-quarter net income, but income from continuing operations rose in part on better margins on retail fuel sales.
The publicly traded gasoline and convenience store retailer (NYSE: MUSA) said third-quarter net income was $60.5 million, or $1.41 per share, down 3.5 percent from $62.7 million, or $1.36 per share, during the same quarter last year.
Revenue was $3.4 billion, down 26 percent from $4.6 billion in the same quarter last year.
Earnings per share beat analysts’ estimates of $1.32.
Despite what CEO Andrew Clyde called a volatile quarter, the company reported increased profitability from continuing operations, which came in at $60 million, up 6 percent from the same quarter last year. The company attributed the gain to higher retail fuel margins and improved merchandise sales, which were only partially offset by other factors, including lower product supply.
“Volatility continued in Q3 and carried into Q4, leading to solid retail fuel margins, while overall fuel demand and per site volume comps remained strong, especially after periods that compared to the prior year enhanced fuel discount,” Clyde said in a news release. “Merchandise contribution continues to expand as our new store formats lead to higher sales and improved product mix while keeping our low cost operating model in place. This combination of margin expansion and cost control drives Murphy USA’s competitive position in the marketplace.”
Total quarterly retail fuel gallons sold increased 3.5 percent to 1.08 billion compared to 1.04 billion gallons sold during the same quarter last year. Retail fuel margins, before credit card expenses, increased 6 cents per gallon to 18.1 cents from 17.5 cents in the same quarter last year.
Murphy USA said sharp decreases in wholesale prices during the period helped retail fuel margins.
Quarterly merchandise revenue was $592 million, up 5.5 percent from $561 million in the same quarter last year. During the quarter, Murphy USA opened opened 14 stores, and through early November, it opened nine more. Murphy USA now has about 1,300 locations, including 1,081 Murphy USA sites and 219 Murphy Express sites. The company has 36 sites under construction.
Murphy USA recently announced a deal to sell its Hereford, Texas, ethanol production plant to Green Plains Inc. of Omaha, Nebraska, for $94 million. The deal is expected to close this month.
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