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Murphy USA (MUSA) Q1 Earnings & Revenues Beat Estimates

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Murphy USA Inc. (MUSA - Free Report) announced first-quarter 2021 earnings per share of $2.01, which beat the Zacks Consensus Estimate of $1.53. The outperformance could be attributed to higher retail gasoline price and contribution from the QuickChek acquisition.

However, the company’s bottom line compared unfavorably with the year-earlier quarter's earnings of $2.92 due to a lower retail margin of 15.5 cents per gallon that fell 42.4% year over year and missed the Zacks Consensus Estimate of 17.5 cents.

Meanwhile, Murphy USA’s operating revenues of $3.5 billion rose 11.1% year over year and beat the Zacks Consensus Estimate by $84 million due to improved petroleum product sales.

Revenues from petroleum product sales came in at $2.6 billion, up 6.3% from the first quarter of 2020 and 4.7% above the Zacks Consensus Estimate. Further, merchandise sales, at $833.2 million, rose 21.2% year over year but fell short of the Zacks Consensus Estimate of $871 million.

Murphy USA Inc. Price, Consensus and EPS Surprise

Murphy USA Inc. Price, Consensus and EPS Surprise

Murphy USA Inc. price-consensus-eps-surprise-chart | Murphy USA Inc. Quote

 

Key Takeaways

The company’s total fuel contribution fell 4.1% year over year to $227.3 million due to margin contraction and lower volumes. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 22.5 cents per gallon, same as the first quarter of 2020.

Retail fuel contribution was down 44.6% year over year to $156.9 million as margins decreased to 15.5 cents per gallon from 26.9 cents in the corresponding period of 2020. Retail gallons declined 4.2% from the year-ago period to 1 billion in the quarter under review and missed the Zacks Consensus Estimate by 6%. Volumes on an SSS basis (or fuel gallons per month) fell 8.5% from the first quarter of 2020. Meanwhile, the average retail gasoline price during the quarter was $2.37 per gallon, up from $2.14 per gallon a year ago.

Contribution from Merchandise increased 38% to $148.4 million on higher sales and better unit margins, which, at 17.8%, moved up from the year-ago period’s 15.6%. On an SSS basis, total merchandise contribution was up 3.7% year over year in the quarter under review on the back of 2% higher tobacco margins. Meanwhile, merchandise sales rose 4.3% on an SSS basis, driven by increase of 2.2% in tobacco sales and 9.9% in non-tobacco sales.

Fuel gallons were down 8.9% from the prior-year period while merchandise sales increased 11.9% on an average per store month (or APSM) basis.

Balance Sheet

As of Mar 31, Murphy USA — which opened one new retail location and added 156 stores related to the QuickChek acquisition in the quarter to take its store count to 1,660   — had cash and cash equivalents of $304.1 million, and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 69.7%.

During the quarter, the company bought back shares worth $50 million.

Zacks Rank & Stock Picks

Murphy USA carries a Zacks Rank #3 (Hold).

Some better-ranked players in the energy space are Exxon Mobil Corporation (XOM - Free Report) , Imperial Oil Limited (IMO - Free Report) and Suncor Energy (SU - Free Report) . All the companies sport a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

ExxonMobil has an expected earnings growth rate of 1,087.88% for the current year.  

Imperial Oil has an expected earnings growth rate of 336.59% for the current year.

Suncor Energy has an expected earnings growth rate of 223.64% for the current year.

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