Gasoline retailer Murphy USA Inc. of El-Dorado reported first-quarter profits Monday of nearly $86 million, far over its $23 million in income from the same period last year.
The increase was largely driven by a $56 million after-tax gain on Murphy’s sale of the CAM pipeline system, a deal that closed on March 31, according to the company’s quarterly financial results
The CAM pipeline system, which transports crude oil from the Louisiana Offshore Oil Port to three Gulf Coast refineries, was sold to undisclosed “investment-grade buyer.” The system was previously owned by Murphy USA’s former parent company, Murphy Oil Corp. of El Dorado.
The $85.9 million in quarterly income, $2.08 per diluted share, also reflected a 4.6 percent increase in retail fuel volume at the retailer’s 1,336 stores, including 225 Murphy Express outlets and 1,111 Murphy USA stores, many at sites in conjunction with Wal-Mart. The company is now building 23 new sites and rebuilding 10 others, according to a news release.
“First-quarter results demonstrate tangible progress on our 2016 initiatives as we executed our formula for value creation,” President and CEO Andrew Clyde said in a statement, noting that construction started the year at a quick pace. He also praised the success of the chain’s supply contract with Core Mark, a San Francisco-based distributor of fresh, refrigerated and frozen merchandise to convenience stores.
“Total margin contribution increased 16.8 percent for the quarter, due primarily to the benefits recognized from the Core Mark supply contract,” the company said.
Total station and operating expenses increased $2.2 million to nearly $117 million during the quarter, reflecting the costs of new stores ramping up. But the company pointed out that per-store expenses, excluding credit card fee costs, fell by 1.7 percent.
The company (NYSE: MUSA) also reported that it had repurchased $2.4 million shares during the quarter for $150 million. The company had 39,396,549 outstanding common shares as of March 31.
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