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Murphy USA (MUSA) Down 0% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Murphy USA (MUSA - Free Report) . Shares have lost about 0% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Murphy USA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Murphy USA’s Q1 Earnings and Revenues Top Estimates

Murphy USA announced first-quarter 2022 earnings per share of $6.08, which handily beat the Zacks Consensus Estimate of $2.65 and more than tripled from the year-earlier bottom line of $2.01. The outperformance could be attributed to a rise in the retail gasoline price and a higher retail margin of 34 cents per gallon that was up 51.1% year over year.

Meanwhile, Murphy USA’s operating revenues of $5.1 billion surged 44.7% year over year and beat the consensus mark by $530 million primarily due to improved petroleum product sales.

Revenues from petroleum product sales came in at $4.1 billion, up 57.4% from the first quarter of 2021 and 4.6% above the Zacks Consensus Estimate. Merchandise sales, at $892 million, rose 7.1% year over year but underperformed the Zacks Consensus Estimate of $924 million.

Key Takeaways

MUSA’s total fuel contribution rose 62.7% year over year to $369.8 million due to margin expansion and higher volumes. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 34 cents per gallon, which improved more than 51% from the first quarter of 2021.

Retail fuel contribution increased 61.6% year over year to $253.6 million as margins widened to 23.3 cents per gallon from 15.5 cents in the corresponding period of 2021. Retail gallons rose 7.8% from the year-ago period to 1,088.3 million in the quarter under review and beat the Zacks Consensus Estimate by 4%. Volumes on an SSS basis (or fuel gallons per store) improved 4.7% from the first quarter of 2021 to 222.8 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.43 per gallon, surging from $2.37 per gallon a year ago.

Contribution from Merchandise increased 18.4% to $175.7 million on higher sales and better unit margins, which, at 19.7%, moved up from the year-ago period’s 17.8%. On an SSS basis, total merchandise contribution was up 5.6% year over year primarily on the back of 7.8% higher tobacco margins. Meanwhile, merchandise sales edged up 0.1% on an SSS basis due to an increase of 0.2% in tobacco sales that was effectively offset by a 0.2% loss in non-tobacco sales.

The company’s fuel gallons were up 4.6% from the prior-year period while merchandise sales increased 2.9% on an average per store month basis.

Balance Sheet

As of Mar 31, Murphy USA — which opened 7 new retail locations in the quarter to take its store count to 1,686 — had cash and cash equivalents of $356.2 million, and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 69.4%.

During the quarter, MUSA bought back shares worth $151.8 million.


How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

The consensus estimate has shifted 34.23% due to these changes.

VGM Scores

At this time, Murphy USA has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Murphy USA has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Murphy USA belongs to the Zacks Oil and Gas - Refining and Marketing industry. Another stock from the same industry, TotalEnergies SE Sponsored ADR (TTE - Free Report) , has gained 10.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

TotalEnergies SE Sponsored ADR reported revenues of $68.61 billion in the last reported quarter, representing a year-over-year change of +56.9%. EPS of $3.40 for the same period compares with $1.10 a year ago.

For the current quarter, TotalEnergies SE Sponsored ADR is expected to post earnings of $3.06 per share, indicating a change of +140.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +7.8% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for TotalEnergies SE Sponsored ADR. Also, the stock has a VGM Score of A.


In-Depth Zacks Research for the Tickers Above


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