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Murphy USA (MUSA) Up 7.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Murphy USA (MUSA - Free Report) . Shares have added about 7.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Murphy USA due for a pullback? 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 catalysts.
Murphy USA’s Q2 Earnings Miss Estimate
Murphy USA announced second-quarter 2023 earnings per share of $6.02, which missed the Zacks Consensus Estimate of $6.09 and fell from the year-ago profit of $7.53. The underperformance could be attributed to a fall in the retail gasoline price and fuel contribution, partly offset by higher-than-expected petroleum product sales.
Meanwhile, Murphy USA’s operating revenues of $5.6 billion fell 17.5% year over year and came below the consensus mark by $22 million.
Merchandise sales, at $1 billion, rose 5.5% year over year and outperformed our estimate of $994 million. Revenues from petroleum product sales came in at $4.5 billion, ahead of our estimate of $4.4 billion but down 21.8% from the second quarter of 2022.
Key Takeaways
MUSA’s total fuel contribution fell 13.5% year over year to $365.8 million despite a slight margin improvement. This could be attributed to a drop in total fuel contribution (including retail fuel margin plus product supply and wholesale results), which came in at 29.5 cents per gallon, 15.5% lower than the second quarter of 2022.
Retail fuel contribution increased 4.3% year over year to $334.7 million as margins, at 27 cents per gallon, edged up 1.9% from the corresponding period of 2022. Retail gallons rose 2.3% from the year-ago period to 1,238.8 million in the quarter under review but missed our projection of 1,241.9 million. Volumes on an SSS basis (or fuel gallons per store) dropped 1.1% from the second quarter of 2022 to 245.2 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.21 per gallon, down from $4.21 per gallon a year ago.
Contribution from Merchandise increased 5.1% to $206.8 million on higher sales, which more than offset the marginal fall in unit margins, from 19.8% a year ago to 19.7% in the second quarter of 2023. On an SSS basis, total merchandise contribution was up 2.8% year over year, primarily on the back of 2.9% higher non-tobacco margins. Meanwhile, merchandise sales increased 2.7% on an SSS basis due to an increase in tobacco as well as non-tobacco sales.
The company’s monthly fuel gallons were down 0.6% from the prior-year period, though merchandise sales increased 2.9% on an average per store month basis.
Balance Sheet
As of Jun 30, Murphy USA — which opened seven new retail locations in the quarter to take its store count to 1,725 — had cash and cash equivalents of $92.9 million and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 70.4%.
During the quarter, MUSA bought back shares worth $95.1 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 5.35% due to these changes.
VGM Scores
Currently, Murphy USA has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Murphy USA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Murphy USA is part of the Zacks Oil and Gas - Refining and Marketing industry. Over the past month, Valero Energy (VLO - Free Report) , a stock from the same industry, has gained 3.4%. The company reported its results for the quarter ended June 2023 more than a month ago.
Valero Energy reported revenues of $34.51 billion in the last reported quarter, representing a year-over-year change of -33.2%. EPS of $5.40 for the same period compares with $11.36 a year ago.
Valero Energy is expected to post earnings of $6.25 per share for the current quarter, representing a year-over-year change of -12.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +9.6%.
Valero Energy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Murphy USA (MUSA) Up 7.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Murphy USA (MUSA - Free Report) . Shares have added about 7.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Murphy USA due for a pullback? 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 catalysts.
Murphy USA’s Q2 Earnings Miss Estimate
Murphy USA announced second-quarter 2023 earnings per share of $6.02, which missed the Zacks Consensus Estimate of $6.09 and fell from the year-ago profit of $7.53. The underperformance could be attributed to a fall in the retail gasoline price and fuel contribution, partly offset by higher-than-expected petroleum product sales.
Meanwhile, Murphy USA’s operating revenues of $5.6 billion fell 17.5% year over year and came below the consensus mark by $22 million.
Merchandise sales, at $1 billion, rose 5.5% year over year and outperformed our estimate of $994 million. Revenues from petroleum product sales came in at $4.5 billion, ahead of our estimate of $4.4 billion but down 21.8% from the second quarter of 2022.
Key Takeaways
MUSA’s total fuel contribution fell 13.5% year over year to $365.8 million despite a slight margin improvement. This could be attributed to a drop in total fuel contribution (including retail fuel margin plus product supply and wholesale results), which came in at 29.5 cents per gallon, 15.5% lower than the second quarter of 2022.
Retail fuel contribution increased 4.3% year over year to $334.7 million as margins, at 27 cents per gallon, edged up 1.9% from the corresponding period of 2022. Retail gallons rose 2.3% from the year-ago period to 1,238.8 million in the quarter under review but missed our projection of 1,241.9 million. Volumes on an SSS basis (or fuel gallons per store) dropped 1.1% from the second quarter of 2022 to 245.2 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.21 per gallon, down from $4.21 per gallon a year ago.
Contribution from Merchandise increased 5.1% to $206.8 million on higher sales, which more than offset the marginal fall in unit margins, from 19.8% a year ago to 19.7% in the second quarter of 2023. On an SSS basis, total merchandise contribution was up 2.8% year over year, primarily on the back of 2.9% higher non-tobacco margins. Meanwhile, merchandise sales increased 2.7% on an SSS basis due to an increase in tobacco as well as non-tobacco sales.
The company’s monthly fuel gallons were down 0.6% from the prior-year period, though merchandise sales increased 2.9% on an average per store month basis.
Balance Sheet
As of Jun 30, Murphy USA — which opened seven new retail locations in the quarter to take its store count to 1,725 — had cash and cash equivalents of $92.9 million and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 70.4%.
During the quarter, MUSA bought back shares worth $95.1 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 5.35% due to these changes.
VGM Scores
Currently, Murphy USA has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Murphy USA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Murphy USA is part of the Zacks Oil and Gas - Refining and Marketing industry. Over the past month, Valero Energy (VLO - Free Report) , a stock from the same industry, has gained 3.4%. The company reported its results for the quarter ended June 2023 more than a month ago.
Valero Energy reported revenues of $34.51 billion in the last reported quarter, representing a year-over-year change of -33.2%. EPS of $5.40 for the same period compares with $11.36 a year ago.
Valero Energy is expected to post earnings of $6.25 per share for the current quarter, representing a year-over-year change of -12.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +9.6%.
Valero Energy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.