Murphy USA Profits Jump On Strong Fuel Margins, Sales Off Nearly 30%

Shares of Murphy USA were moving lower in early trading Tuesday after the El Dorado-based retail marketer saw its first quarter profits improve more than 138% from a year ago on stronger fuel margins and better merchandise sales at its gasoline stations.

“The first quarter of 2015 got off to a strong start as retail fuel volume and margin momentum carried over from the fourth quarter of last year,” said Murphy USA President and CEO Andrew Clyde. “Merchandise sales and margins also remain robust while low gas prices have led consumers to upgrade their product choices.”

For the period ended March 31, Murphy USA reported net income of $22.9 million, or 50 cents per share, compared to year ago net income of $9.6 million, or 21 cents per share. However, first quarter revenues of $3 billion were down 29% from $4.2 billion a year ago.

Analysts surveyed by Thomson Reuters had expected the Arkansas gasoline retailer to report first quarter earnings of 51 cents per share on revenue of $2.9 billion.

During the first quarter of 2015, Murphy USA opened five retail locations. Through early May 2015, the company has opened an additional three sites. Currently, Murphy USA has 1,271 total locations in operation that include 1,062 Murphy USA sites and 209 Murphy Express sites.

“We also have 16 sites currently under construction that will add to our network in the near future,” company officials said.

Here are key Murphy USA highlights for the first quarter:

· Earnings per share, assuming dilution, were $0.50 compared to $0.21 in Q1 2014

· Retail fuel volumes grew 5.8% overall for the quarter and 1% on an average per store month (APSM) basis

· Non-tobacco merchandise sales increased 6.7% APSM and associated margin dollars increased 3.2% APSM

· New stores added in the quarter totaled five with an additional three sites opened since quarter end and 16 sites under construction

· Hereford ethanol production rate and yield achieved a combined quarterly plant record, offsetting in part weaker crush spreads

· Share repurchases in the first quarter totaled $39 million

· Cash and cash equivalents ended the quarter at $287.7 million

In Tuesday’s trading session, Murphy shares were down $2.01 or 3.03% at $64.24. The Arkansas gasoline retailer shares have traded in the range of $42.57 and $73.97 over the past year.