Murphy USA grows third quarter earnings on increased gas, retail sales

Murphy USA Inc. saw third quarter earnings rise slightly from a year ago as the El Dorado retailer and convenience store operator continued its aggressive expansion at Walmart parking lots across the U.S., company officials said after the close of market on Wednesday.

“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,” said Murphy President and CEO Andrew Clyde. “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.”

For the period ended Sept. 30, Murphy USA reported earnings of $1.41 per share, or $60.5 million, up 3.7% compared to earnings of 1.36 cents per share, or $62.6 million, a year ago. Third quarter revenues fell well short of year ago sales, however, declining more than 26% to $3.4 billion from $4.6 billion in 2014.

Earnings per share from continuing operations rose 13.8% to $1.40 per share, compared to $1.23 per share in the same period of 2014. Analysts surveyed by Thomson Reuters had expected the Arkansas gasoline retailer to report third quarter earnings of $1.32 cents per share on revenue of $3.75 billion.

During the third quarter, Murphy USA opened 14 new retail locations. Through early November, the El Dorado-based spinoff of Murphy Oil Corp. opened an additional nine sites. Altogether, Murphy USA has 1,300 total locations in operation that include 1,081 Murphy USA sites and 219 Murphy Express sites. There are also 36 sites under construction that will be added to Murphy USA’s growing retail network in the near future, company officials said.

Overall, the El Dorado retail marketer’s retail fuel sales for the quarter increased 3.7% to 3.05 billion gallons sold in 2015 compared to 2.94 million gallons sold in 2014. Quarterly merchandise revenues rose 4.7% million to $1.69 billion from $1.61 billion in the 2014 period.

On Monday, the El Dorado gas retailer reached an agreement to sell the company’s Hereford, Texas-based ethanol plant to Green Plains Inc. for a purchase price of $93.8 million. Last week, Murphy USA Inc. announced that it entered into a five-year supply agreement with West Coast retailer marketer Core-Mark to be the primary non-fuel wholesale distributor to the Arkansas company’s retail locations across 23 states.

“Our commitment to execution and driving shareholder value was clearly evident this quarter,” said Clyde. “Our organic growth plan is on track to deliver over 70 new sites by year end, the $250 million share repurchase program was completed, and the Hereford ethanol plant sales process moved into the final steps to deliver $94 million in proceeds.

In Wednesday’s trading session, Murphy shares (NYSE: MUSA) closed at $61.84, down 46 cents. Murphy USA shares have traded in the range of $47.73 and $73.97 during the past 52 weeks.