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Murphy USA (MUSA) Q4 Earnings Preview: What You Need to Know
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Murphy USA (MUSA - Free Report) is set to release fourth-quarter results on Feb 7. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $6.14 per share on revenues of $5.5 billion.
Let’s delve into the factors that might have influenced the downstream operator’s results in the December quarter. But it’s worth taking a look at MUSA’s previous-quarter performance first.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, the El Dorado, AR-based motor fuel retailer beat the consensus mark due to higher-than-expected petroleum product sales. MUSA had reported earnings per share of $7.69, well above the Zacks Consensus Estimate of $6.08. However, revenues of $6.2 billion generated by the firm came below the consensus mark by $31 million due to a fall in the retail gasoline price and fuel contribution.
MUSA beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two, resulting in an earnings surprise of 7%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the fourth-quarter bottom line has been revised 2.8% upward in the past seven days. The estimated figure indicates a 17.9% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 2.5% increase from the year-ago period.
Factors to Consider
Murphy USA is expected to have benefited from higher petroleum product sales during the quarter. Our model projects the company’s fourth-quarter petroleum product sales at $4.4 billion, up 2% from the year-ago quarter’s level of $4.3 billion. Further, our model predicts MUSA to clock merchandise sales of $1 billion compared with the year-ago quarter’s $989.4 million. This sales boost is likely to have buoyed the fourth-quarter revenues and cash flows of Murphy USA.
However, Murphy USA is expected to have suffered from a deteriorating margin environment. The company’s third-quarter fuel margins narrowed to 28.70 cents per gallon from 39.30 cents in the corresponding period of 2022. With weak crude differentials, the unfavorable margin story is likely to have continued in the to-be-reported quarter. As a reflection of this, our model projection for fourth-quarter retail fuel margin stands at 27.70 cents per gallon, suggesting a drop of 2.2% from the year-ago period.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Murphy USA is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -3.95%.
Zacks Rank: MUSA, currently, carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Murphy USA, here are some firms from the energy space that you may want to consider on the basis of our model:
USA Compression Partners, LP (USAC - Free Report) has an Earnings ESP of +4.35% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 13.
The 2024 Zacks Consensus Estimate for USA Compression Partners indicates 100% year-over-year earnings per share growth. Valued at around $2.5 billion, USAC has gained 26% in a year.
ExxonMobil (XOM - Free Report) has an Earnings ESP of +0.47% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 2.
ExxonMobil beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. It has a trailing four-quarter earnings surprise of 0.6%, on average. Valued at around $408.2 billion, XOM has lost 11.1% in a year.
Plains All American Pipeline, L.P. (PAA - Free Report) has an Earnings ESP of +6.12% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 9.
Plains All American Pipeline beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of 18.3%, on average. Valued at around $11.1 billion, PAA has gained 30% in a year.
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Murphy USA (MUSA) Q4 Earnings Preview: What You Need to Know
Murphy USA (MUSA - Free Report) is set to release fourth-quarter results on Feb 7. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $6.14 per share on revenues of $5.5 billion.
Let’s delve into the factors that might have influenced the downstream operator’s results in the December quarter. But it’s worth taking a look at MUSA’s previous-quarter performance first.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, the El Dorado, AR-based motor fuel retailer beat the consensus mark due to higher-than-expected petroleum product sales. MUSA had reported earnings per share of $7.69, well above the Zacks Consensus Estimate of $6.08. However, revenues of $6.2 billion generated by the firm came below the consensus mark by $31 million due to a fall in the retail gasoline price and fuel contribution.
MUSA beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two, resulting in an earnings surprise of 7%, on average. This is depicted in the graph below:
Murphy USA Inc. Price and EPS Surprise
Murphy USA Inc. price-eps-surprise | Murphy USA Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line has been revised 2.8% upward in the past seven days. The estimated figure indicates a 17.9% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 2.5% increase from the year-ago period.
Factors to Consider
Murphy USA is expected to have benefited from higher petroleum product sales during the quarter. Our model projects the company’s fourth-quarter petroleum product sales at $4.4 billion, up 2% from the year-ago quarter’s level of $4.3 billion. Further, our model predicts MUSA to clock merchandise sales of $1 billion compared with the year-ago quarter’s $989.4 million. This sales boost is likely to have buoyed the fourth-quarter revenues and cash flows of Murphy USA.
However, Murphy USA is expected to have suffered from a deteriorating margin environment. The company’s third-quarter fuel margins narrowed to 28.70 cents per gallon from 39.30 cents in the corresponding period of 2022. With weak crude differentials, the unfavorable margin story is likely to have continued in the to-be-reported quarter. As a reflection of this, our model projection for fourth-quarter retail fuel margin stands at 27.70 cents per gallon, suggesting a drop of 2.2% from the year-ago period.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Murphy USA is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -3.95%.
Zacks Rank: MUSA, currently, carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Murphy USA, here are some firms from the energy space that you may want to consider on the basis of our model:
USA Compression Partners, LP (USAC - Free Report) has an Earnings ESP of +4.35% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 13.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The 2024 Zacks Consensus Estimate for USA Compression Partners indicates 100% year-over-year earnings per share growth. Valued at around $2.5 billion, USAC has gained 26% in a year.
ExxonMobil (XOM - Free Report) has an Earnings ESP of +0.47% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 2.
ExxonMobil beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. It has a trailing four-quarter earnings surprise of 0.6%, on average. Valued at around $408.2 billion, XOM has lost 11.1% in a year.
Plains All American Pipeline, L.P. (PAA - Free Report) has an Earnings ESP of +6.12% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 9.
Plains All American Pipeline beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of 18.3%, on average. Valued at around $11.1 billion, PAA has gained 30% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.