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Why Is Murphy USA (MUSA) Down 0.4% Since Last Earnings Report?
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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 0.4% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Murphy USA’s Q3 Earnings Beat Estimate
Murphy USA announced third-quarter 2023 earnings per share of $7.69, which beat the Zacks Consensus Estimate of $6.08. The outperformance reflects higher-than-expected petroleum product sales.
However, the company’s bottom line fell from the year-ago adjusted profit of $9.28 due to a fall in the retail gasoline price and fuel contribution.
Meanwhile, Murphy USA’s operating revenues of $5.8 billion fell 6.4% year over year and came below the consensus mark by $31 million.
Merchandise sales, at $1.1 billion, rose 2.8% year over year and outperformed our estimate of $1 billion. Revenues from petroleum product sales came in at $4.7 billion, ahead of our estimate of $4.5 billion but down 8.3% from the third quarter of 2022.
In important news for investors, MUSA’s board of directors recently declared a quarterly cash dividend of 41 cents per share to its common shareholders of record on Nov 6. The payout, which represents a 5.1% sequential increase, will be made on Dec 1.
Key Takeaways
MUSA’s total fuel contribution fell 10.5% year over year to $419 million due to margin contraction. Moreover, total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 34.5 cents per gallon, 8.2% lower than the third quarter of 2022.
Retail fuel contribution decreased 28.8% year over year to $348.6 million as margins, at 28.7 cents per gallon, fell 27% from the corresponding period of 2022. Retail gallons fell 2.5% from the year-ago period to 1,214.9 million in the quarter under review and missed our projection of 1,271.9 million. Volumes on an SSS basis (or fuel gallons per store) dropped 4% from the third quarter of 2022 to 241.7 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.41 per gallon, down from $3.67 per gallon a year ago.
Contribution from Merchandise increased 3% to $211.8 million on higher sales and a marginal rise in unit margins, from 20% a year ago to 20.1% in the third quarter of 2023. On an SSS basis, total merchandise contribution was up 1.2% year over year, primarily on the back of 3.1% higher tobacco margins. Meanwhile, merchandise sales increased 1% on an SSS basis, again due to an increase in tobacco sales.
The company’s monthly fuel gallons were down 4.2% from the prior-year period, though merchandise sales increased 1.4% on an average per store month basis.
Balance Sheet
As of Sep 30, Murphy USA — which opened three new retail locations in the quarter to take its store count to 1,724 — had cash and cash equivalents of $124.8 million and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 68.1%.
During the quarter, MUSA bought back shares worth $65.3 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 11.01% due to these changes.
VGM Scores
Currently, Murphy USA has a nice Growth Score of B, a grade with the same score on the momentum front. 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 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 belongs to the Zacks Oil and Gas - Refining and Marketing industry. Another stock from the same industry, Phillips 66 (PSX - Free Report) , has gained 9.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Phillips 66 reported revenues of
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Why Is Murphy USA (MUSA) Down 0.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Murphy USA (MUSA - Free Report) . Shares have lost about 0.4% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Murphy USA’s Q3 Earnings Beat Estimate
Murphy USA announced third-quarter 2023 earnings per share of $7.69, which beat the Zacks Consensus Estimate of $6.08. The outperformance reflects higher-than-expected petroleum product sales.
However, the company’s bottom line fell from the year-ago adjusted profit of $9.28 due to a fall in the retail gasoline price and fuel contribution.
Meanwhile, Murphy USA’s operating revenues of $5.8 billion fell 6.4% year over year and came below the consensus mark by $31 million.
Merchandise sales, at $1.1 billion, rose 2.8% year over year and outperformed our estimate of $1 billion. Revenues from petroleum product sales came in at $4.7 billion, ahead of our estimate of $4.5 billion but down 8.3% from the third quarter of 2022.
In important news for investors, MUSA’s board of directors recently declared a quarterly cash dividend of 41 cents per share to its common shareholders of record on Nov 6. The payout, which represents a 5.1% sequential increase, will be made on Dec 1.
Key Takeaways
MUSA’s total fuel contribution fell 10.5% year over year to $419 million due to margin contraction. Moreover, total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 34.5 cents per gallon, 8.2% lower than the third quarter of 2022.
Retail fuel contribution decreased 28.8% year over year to $348.6 million as margins, at 28.7 cents per gallon, fell 27% from the corresponding period of 2022. Retail gallons fell 2.5% from the year-ago period to 1,214.9 million in the quarter under review and missed our projection of 1,271.9 million. Volumes on an SSS basis (or fuel gallons per store) dropped 4% from the third quarter of 2022 to 241.7 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.41 per gallon, down from $3.67 per gallon a year ago.
Contribution from Merchandise increased 3% to $211.8 million on higher sales and a marginal rise in unit margins, from 20% a year ago to 20.1% in the third quarter of 2023. On an SSS basis, total merchandise contribution was up 1.2% year over year, primarily on the back of 3.1% higher tobacco margins. Meanwhile, merchandise sales increased 1% on an SSS basis, again due to an increase in tobacco sales.
The company’s monthly fuel gallons were down 4.2% from the prior-year period, though merchandise sales increased 1.4% on an average per store month basis.
Balance Sheet
As of Sep 30, Murphy USA — which opened three new retail locations in the quarter to take its store count to 1,724 — had cash and cash equivalents of $124.8 million and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 68.1%.
During the quarter, MUSA bought back shares worth $65.3 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 11.01% due to these changes.
VGM Scores
Currently, Murphy USA has a nice Growth Score of B, a grade with the same score on the momentum front. 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 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 belongs to the Zacks Oil and Gas - Refining and Marketing industry. Another stock from the same industry, Phillips 66 (PSX - Free Report) , has gained 9.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Phillips 66 reported revenues of