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Murphy (MUSA) Q2 Earnings Top on High Merchandise Margins
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Murphy USA Inc. (MUSA - Free Report) reported stronger-than-expected results in the second quarter on higher merchandise margins. As a result, the company’s adjusted net income per share came in at $1.58, surpassing the Zacks Consensus Estimate of $1.21. Further, the bottom line also improved from the year-ago figure of $1.51 per share on the back of higher petroleum product and merchandise sales.
Murphy’s operating revenues of $3,829 million beat the Zacks Consensus Estimate of $3,550 million on higher-than-expected petroleum product sales. Revenues from petroleum product sales came in at $3,193.7 million, surpassing the Zacks Consensus Estimate of $2,881 million. The top line also increased around 19% from the year-ago figure of $3,211.1 million.
The company’s total fuel contribution was down 6.1% year over year to $180.1 million amid lower retail fuel contribution, partly offset by solid contribution from Product Supply and Wholesale Business (PS&W).
Retail fuel contribution declined 20.3% year over year to $140.3 million amid lower margins, which decreased 21.7% from the prior-year quarter. The results were partly offset by rise in retail gallons, which increased 1.6% to 1.1 billion gallons in the quarter under review. While total retail gallons sold increased, volumes on a same-store sales (SSS) basis declined 1.5% from the second quarter of 2017.
Contribution from Merchandise set a new record, increasing 4.6% to stand at $102.3 million on higher unit margins, which increased to 16.6% from 16.1% a year ago. On SSS basis, total merchandise contribution was 2% higher in the quarter under review on the back of active promotions and higher tobacco/non-tobacco margins. Tobacco and non-tobacco margins increased 1.9% and 2.2%, respectively.
On an average per store month (or APSM) basis, fuel gallons fell 1.7% and merchandise sales declined 1.6%. On SSS basis, fuel gallons per month declined 1.5% and merchandise sales decreased 1%.
Balance Sheet & Stock Buyback
As of Jun 30, the company had cash and cash equivalents of $71.9 million and long-term debt (including lease obligations) of $850.8 million, with a debt-to-capitalization ratio of 55.4%.
During the quarter under review, Murphy returned $72.7 million of capital to its shareholders. The company repurchased 1.1 million shares at an average price of $68.22 per share.
Bonanza Creek surpassed earnings estimates in each of the trailing four quarters, with an average of 215.36%.
Northern Oil and Gas delivered an average positive earnings surprise of 160.42% in the preceding four quarters.
Penn Virginia topped estimates in each of the last four quarters, delivering an average positive earnings surprise of 18.03%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Murphy (MUSA) Q2 Earnings Top on High Merchandise Margins
Murphy USA Inc. (MUSA - Free Report) reported stronger-than-expected results in the second quarter on higher merchandise margins. As a result, the company’s adjusted net income per share came in at $1.58, surpassing the Zacks Consensus Estimate of $1.21. Further, the bottom line also improved from the year-ago figure of $1.51 per share on the back of higher petroleum product and merchandise sales.
Murphy’s operating revenues of $3,829 million beat the Zacks Consensus Estimate of $3,550 million on higher-than-expected petroleum product sales. Revenues from petroleum product sales came in at $3,193.7 million, surpassing the Zacks Consensus Estimate of $2,881 million. The top line also increased around 19% from the year-ago figure of $3,211.1 million.
Murphy USA Inc. Price, Consensus and EPS Surprise
Murphy USA Inc. Price, Consensus and EPS Surprise | Murphy USA Inc. Quote
Key Tidbits
The company’s total fuel contribution was down 6.1% year over year to $180.1 million amid lower retail fuel contribution, partly offset by solid contribution from Product Supply and Wholesale Business (PS&W).
Retail fuel contribution declined 20.3% year over year to $140.3 million amid lower margins, which decreased 21.7% from the prior-year quarter. The results were partly offset by rise in retail gallons, which increased 1.6% to 1.1 billion gallons in the quarter under review. While total retail gallons sold increased, volumes on a same-store sales (SSS) basis declined 1.5% from the second quarter of 2017.
Contribution from Merchandise set a new record, increasing 4.6% to stand at $102.3 million on higher unit margins, which increased to 16.6% from 16.1% a year ago. On SSS basis, total merchandise contribution was 2% higher in the quarter under review on the back of active promotions and higher tobacco/non-tobacco margins. Tobacco and non-tobacco margins increased 1.9% and 2.2%, respectively.
On an average per store month (or APSM) basis, fuel gallons fell 1.7% and merchandise sales declined 1.6%. On SSS basis, fuel gallons per month declined 1.5% and merchandise sales decreased 1%.
Balance Sheet & Stock Buyback
As of Jun 30, the company had cash and cash equivalents of $71.9 million and long-term debt (including lease obligations) of $850.8 million, with a debt-to-capitalization ratio of 55.4%.
During the quarter under review, Murphy returned $72.7 million of capital to its shareholders. The company repurchased 1.1 million shares at an average price of $68.22 per share.
Zacks Rank and Key Picks
Murphy currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the same industry include Bonanza Creek Energy, Inc. , Northern Oil and Gas, Inc. (NOG - Free Report) , and Penn Virginia Corporation , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bonanza Creek surpassed earnings estimates in each of the trailing four quarters, with an average of 215.36%.
Northern Oil and Gas delivered an average positive earnings surprise of 160.42% in the preceding four quarters.
Penn Virginia topped estimates in each of the last four quarters, delivering an average positive earnings surprise of 18.03%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>