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Murphy USA (MUSA) Stock Down Since Q4 Earnings: Here's Why
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The stock of motor fuel retailer Murphy USA Inc. (MUSA - Free Report) has lost 6.7% since its fourth-quarter earnings announcement on Feb 2. While MUSA managed to score comfortable top and bottom-line beats, the negative investor reaction could probably be attributed to rising costs due to inflationary pressure and a higher wage bill. As a matter of fact, the company’s quarterly average operating expenses (excluding payment fees and rent) jumped 40.8% year over year to $30,000 on an average per store month (or APSM) basis.
What Did Murphy USA’s Earnings Unveil?
Murphy USA announced fourth-quarter 2021 earnings per share of $4.23, which beat the Zacks Consensus Estimate of $3.68 and nearly doubled from the year-earlier bottom line of $2.16. The outperformance could be attributed to a rise in the retail gasoline price, contribution from the QuickChek acquisition and a higher retail margin of 27.7 cents per gallon that was up 38.9% year over year.
Meanwhile, Murphy USA’s operating revenues of $4.8 billion soared 66.6% year over year and beat the consensus mark by $111 million primarily due to improved petroleum product sales.
Revenues from petroleum product sales came in at $3.8 billion, up 82.2% from the fourth quarter of 2020 and 2% above the Zacks Consensus Estimate. Merchandise sales, at $927.7 million, rose 24.7% year over year and outperformed the Zacks Consensus Estimate of $911 million.
MUSA’s total fuel contribution rose 53.1% year over year to $307.4 million due to margin expansion and higher volumes. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 27.5 cents per gallon, which improved nearly 39% from the fourth quarter of 2020.
Retail fuel contribution increased 83.5% year over year to $285.3 million as margins widened to 25.5 cents per gallon from 15.4 cents in the corresponding period of 2020. Retail gallons rose 10.5% from the year-ago period to 1,119.5 million in the quarter under review and edged past the Zacks Consensus Estimate by 0.5%. Volumes on an SSS basis (or fuel gallons per store) improved 2.7% from the fourth quarter of 2020 to 229.6 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.05 per gallon, surging from $1.87 per gallon a year ago.
Contribution from Merchandise increased 57.2% to $181.4 million on higher sales and better unit margins, which, at 19.6%, moved up from the year-ago period’s 15.5%. On an SSS basis, total merchandise contribution was up 3.7% year over year on the back of 11.3% higher non tobacco margins. Meanwhile, merchandise sales fell 1% on an SSS basis due to a decrease of 3.4% in tobacco sales that was partly offset by a 5.4% gain in non-tobacco sales.
Fuel gallons were up 2.7% from the prior-year period while merchandise sales increased 11.4% on an average per store month basis.
Balance Sheet
As of Dec 31, Murphy USA — which opened 12 new retail locations in the quarter and closed two to take its store count to 1,679 — had cash and cash equivalents of $256.4 million, and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 69%.
During the quarter, MUSA bought back shares worth $123.5 million.
Guidance
The company projects 2022 fuel volume in a range of 235 to 245 thousand gallons on the APSM basis. Further, Murphy USA’s 2022 guidance includes up to 45 new stores and up to 35 raze-and-rebuilds, $740-$760 million in merchandise margin contribution, and $350-$400 million in capital expenditures.
Zacks Rank & Stock Picks
Murphy USA currently carries a Zacks Rank #3 (Hold).
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Vermilion Energy delivered a four-quarter average earnings surprise of 54.4%, including a 100% beat in Q3. VET shares have gained around 172.6% in a year.
ConocoPhillips: ConocoPhillips is valued at around $116.5 billion. The consensus estimate for COP’s 2022 earnings has been revised 16.5% upward over the past 60 days.
COP beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 12.6%. ConocoPhillips has rallied around 81.4% in a year.
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Murphy USA (MUSA) Stock Down Since Q4 Earnings: Here's Why
The stock of motor fuel retailer Murphy USA Inc. (MUSA - Free Report) has lost 6.7% since its fourth-quarter earnings announcement on Feb 2. While MUSA managed to score comfortable top and bottom-line beats, the negative investor reaction could probably be attributed to rising costs due to inflationary pressure and a higher wage bill. As a matter of fact, the company’s quarterly average operating expenses (excluding payment fees and rent) jumped 40.8% year over year to $30,000 on an average per store month (or APSM) basis.
What Did Murphy USA’s Earnings Unveil?
Murphy USA announced fourth-quarter 2021 earnings per share of $4.23, which beat the Zacks Consensus Estimate of $3.68 and nearly doubled from the year-earlier bottom line of $2.16. The outperformance could be attributed to a rise in the retail gasoline price, contribution from the QuickChek acquisition and a higher retail margin of 27.7 cents per gallon that was up 38.9% year over year.
Meanwhile, Murphy USA’s operating revenues of $4.8 billion soared 66.6% year over year and beat the consensus mark by $111 million primarily due to improved petroleum product sales.
Revenues from petroleum product sales came in at $3.8 billion, up 82.2% from the fourth quarter of 2020 and 2% above the Zacks Consensus Estimate. Merchandise sales, at $927.7 million, rose 24.7% year over year and outperformed the Zacks Consensus Estimate of $911 million.
Murphy USA Inc. Price, Consensus and EPS Surprise
Murphy USA Inc. price-consensus-eps-surprise-chart | Murphy USA Inc. Quote
Key Takeaways
MUSA’s total fuel contribution rose 53.1% year over year to $307.4 million due to margin expansion and higher volumes. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 27.5 cents per gallon, which improved nearly 39% from the fourth quarter of 2020.
Retail fuel contribution increased 83.5% year over year to $285.3 million as margins widened to 25.5 cents per gallon from 15.4 cents in the corresponding period of 2020. Retail gallons rose 10.5% from the year-ago period to 1,119.5 million in the quarter under review and edged past the Zacks Consensus Estimate by 0.5%. Volumes on an SSS basis (or fuel gallons per store) improved 2.7% from the fourth quarter of 2020 to 229.6 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.05 per gallon, surging from $1.87 per gallon a year ago.
Contribution from Merchandise increased 57.2% to $181.4 million on higher sales and better unit margins, which, at 19.6%, moved up from the year-ago period’s 15.5%. On an SSS basis, total merchandise contribution was up 3.7% year over year on the back of 11.3% higher non tobacco margins. Meanwhile, merchandise sales fell 1% on an SSS basis due to a decrease of 3.4% in tobacco sales that was partly offset by a 5.4% gain in non-tobacco sales.
Fuel gallons were up 2.7% from the prior-year period while merchandise sales increased 11.4% on an average per store month basis.
Balance Sheet
As of Dec 31, Murphy USA — which opened 12 new retail locations in the quarter and closed two to take its store count to 1,679 — had cash and cash equivalents of $256.4 million, and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 69%.
During the quarter, MUSA bought back shares worth $123.5 million.
Guidance
The company projects 2022 fuel volume in a range of 235 to 245 thousand gallons on the APSM basis. Further, Murphy USA’s 2022 guidance includes up to 45 new stores and up to 35 raze-and-rebuilds, $740-$760 million in merchandise margin contribution, and $350-$400 million in capital expenditures.
Zacks Rank & Stock Picks
Murphy USA currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy space could look at better options like Vermilion Energy (VET - Free Report) , ConocoPhillips (COP - Free Report) and ExxonMobil (XOM - 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.
Vermilion Energy: Vermilion Energy is valued at around $2.8 billion. The Zacks Consensus Estimate for VET’s 2022 earnings has been revised 40% upward over the past 60 days.
Vermilion Energy delivered a four-quarter average earnings surprise of 54.4%, including a 100% beat in Q3. VET shares have gained around 172.6% in a year.
ConocoPhillips: ConocoPhillips is valued at around $116.5 billion. The consensus estimate for COP’s 2022 earnings has been revised 16.5% upward over the past 60 days.
COP beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 12.6%. ConocoPhillips has rallied around 81.4% in a year.
ExxonMobil: ExxonMobil has a projected earnings growth rate of 27.3% for this year. The Zacks Consensus Estimate for XOM’s 2022 earnings has been revised 15.1% upward over the past 60 days.
ExxonMobil beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 5.8%. XOM shares have gained around 50.4% in a year.