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Murphy USA (MUSA) Provides Fourth-Quarter Preliminary Update

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Murphy USA Inc. (MUSA - Free Report) projects fourth-quarter 2020 adjusted earnings per share of $2.16, indicating an increase from the year-ago quarter’s reported value of $1.54. Further, adjusted EBITDA is estimated to be $136.3million, implying a rise from the year-ago quarter’s reported figure of $112.4 million.

Q4 Key Estimates

Murphy USA’s total fuel contribution is likely to have increased 9.7% to $200.8 million from the year-ago quarter’s actuals. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) is estimated to be 19.8 cents per gallon, suggesting an improvement from 17.1 cents reported in the fourth quarter of 2019.

Retail fuel contribution is likely to have been down 5.5% to $1,012.7 million from the prior-year period’s actuals. Further, retail fuel volume per site is projected to decline 5.9% to 223.6 million from the year-ago period’s reported number.

Contribution from Merchandise is expected to increase 9.7% to $115.4 million from the year-ago quarter’s reported level.

Murphy USA is scheduled to release fourth-quarter 2020 results on Wednesday Feb 3, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is $1.90 per share and for revenues is $2.93 billion.

Store Details

As of Dec 30, 2020, Murphy USA opened 15 new stores and re-opened 20 raze-and-rebuild stores. Last month, the companymade an elaborate launch of its 1500th outlet in Mesquite, TX, which also marks its 47th store unveiling this year.Spread across a sprawling 2800 square foot area at 1101 U.S. 80 Frontage Road, this new Murphy Express will offer a diversified choice of beverage and snacks to its customers.

In the same month, Murphy USA reached an agreement to acquire QuickChek Corporation in an all-cash consideration of $645 million.

Andrew Clyde, president and CEO says, "As we exit 2020, we are excited to embark upon a new chapter in our value creation strategy as outlined in our October 2020 Capital Allocation update, which included a higher rate of planned organic growth, continuing to return capital through share repurchases, a newly announced 25 cents per share quarterly dividend, and the potential for select M&A activity, including to accelerate development of food and beverage capabilities."

Balance Sheet

During the quarter under review, the company bought back 1.3 million common shares worth $169.1 million.

Murphy USA is estimated to have ended 2020 with lower year-over-year cash and cash equivalents. At the end of the year, the company is expected to have reported $163.6 million in cash and cash equivalents compared with $280.3 million at the previous year-end.

Company Summary

Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States. This El Dorado, AR-based company originated from the 2013 spin-off of Murphy Oil Corporation’s downstream business into a separate, independent and publicly-traded entity.

The company markets refined products through a chain of retail stations almost all of which are located near a Walmart supercenter, primarily in the Southeast, Southwest and Midwest United States.

Zacks Rank & Key Picks

Murphy USA currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are DCP Midstream Partners, LP (DCP - Free Report) , Plains Group Holdings, L.P. (PAGP - Free Report) and CNX Resources Corporation (CNX - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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