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Motor fuel retailer Murphy USA Inc. (MUSA - Free Report) announced fourth-quarter 2023 earnings per share of $7, which beat the Zacks Consensus Estimate of $6.31 and came ahead of the year-ago profit of $5.21. The outperformance primarily reflects higher fuel margins and robust merchandise sales.
However, Murphy USA’s operating revenues of $5.1 billion fell 5.5% year over year and missed the consensus mark by $291 million due to a fall in the retail gasoline price.
Merchandise sales, at $1 billion, rose 2.9% year over year and came in line with our estimate. Revenues from petroleum product sales came in at $4 billion, below our estimate of $4.4 billion and down 7.2% from the fourth quarter of 2022.
MUSA’s total fuel contribution rose 6.4% year over year to $393 million due to margin expansion. Moreover, total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 32.5 cents per gallon, 6.2% higher than the fourth quarter of 2022.
Retail fuel contribution increased 10.2% year over year to $376 million as margins widened to 31.1 cents per gallon from 28.3 cents in the corresponding period of 2022. Retail gallons edged up 0.2% from the year-ago period to 1,208.4 million in the quarter under review but missed our estimate by 2%. Volumes on an SSS basis (or fuel gallons per store) declined 1.5% from the fourth quarter of 2022 to 237.9 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $2.97 per gallon, down from $3.19 per gallon a year ago.
Contribution from Merchandise increased 4.6% to $197.7 million on higher sales and a rise in unit margins from 19.1% a year ago to 19.4% in the fourth quarter of 2023. On an SSS basis, total merchandise contribution was up 3.2% year over year, primarily on the back of 7.1% higher tobacco margins. Meanwhile, merchandise sales increased 1.4% on an SSS basis, again due to an increase in tobacco sales.
As of Dec 31, Murphy USA — which opened 10 new retail locations in the quarter to take its store count to 1,733 — had cash and cash equivalents of $117.8 million and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 68.3%.
During the quarter, MUSA bought back shares worth $162 million.
Guidance
The company projects 2024 fuel volume in the range of 240-245 thousand gallons on an APSM basis. Further, Murphy USA’s 2024 guidance includes 30-35 new stores and 35-40 raze-and-rebuilds, $860-$880 million in merchandise margin contribution, and $400-$450 million in capital expenditures.
Some Key Refining Earnings
While we have discussed MUSA’s third-quarter results in detail, let’s see how some other refining companies have fared this earnings season.
Phillips 66 (PSX - Free Report) reported adjusted earnings per share of $3.09, comprehensively beating the Zacks Consensus Estimate of $2.37. The outperformance can be primarily attributed to lower costs. This was partially offset by PSX’s declining refining margins worldwide.
For the reported quarter, Phillips 66 generated $2.2 billion of net cash from operations, down from $4.8 billion a year ago. PSX’s capital expenditure and investments totaled $634 million. It paid out dividends of $457 million in the reported quarter. As of Dec 31, 2023, cash and cash equivalents were $3.3 billion. Meanwhile, Phillips 66 reported a total debt of $19.4 billion, reflecting a consolidated debt to capitalization of 34%.
Meanwhile, another refining giant — Valero Energy (VLO - Free Report) — reported better-than-expected fourth-quarter earnings. EPS of $3.55 per share came in above the Zacks Consensus Estimate of $2.95. This was on account of VLO’s lower costs. Bringing more good news, the company increased its quarterly cash dividend on common stock by 5% to $1.07 per share.
At the end of 2023, VLO had cash and cash equivalents of $5.4 billion, while the company’s total debt and finance lease obligations amounted to $11.5 billion. Valero’s fourth-quarter capital investment was $540 million. Of the total, $460 million was allotted for sustaining the business.
Finally, we have Marathon Petroleum’s (MPC - Free Report) fourth-quarter adjusted earnings per share of $3.98, which comfortably beat the Zacks Consensus Estimate of $2.36. The outperformance primarily reflects the stronger-than-expected performance of its key Refining & Marketing segment. Operating income of the segment totaled $1.2 billion, above the consensus mark of $812 million.
MPC’s total refined product sales volumes were 3,612 thousand barrels per day (mbpd), up from 3,532 mbpd in the year-ago quarter. Also, throughput rose from 2,895 mbpd in the year-ago quarter to 2,931 mbpd and outperformed the Zacks Consensus Estimate of 2,891 mbpd.
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Murphy (MUSA) Q4 Earnings Beat Despite Lower Gasoline Prices
Motor fuel retailer Murphy USA Inc. (MUSA - Free Report) announced fourth-quarter 2023 earnings per share of $7, which beat the Zacks Consensus Estimate of $6.31 and came ahead of the year-ago profit of $5.21. The outperformance primarily reflects higher fuel margins and robust merchandise sales.
However, Murphy USA’s operating revenues of $5.1 billion fell 5.5% year over year and missed the consensus mark by $291 million due to a fall in the retail gasoline price.
Merchandise sales, at $1 billion, rose 2.9% year over year and came in line with our estimate. Revenues from petroleum product sales came in at $4 billion, below our estimate of $4.4 billion and down 7.2% from the fourth quarter of 2022.
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 6.4% year over year to $393 million due to margin expansion. Moreover, total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 32.5 cents per gallon, 6.2% higher than the fourth quarter of 2022.
Retail fuel contribution increased 10.2% year over year to $376 million as margins widened to 31.1 cents per gallon from 28.3 cents in the corresponding period of 2022. Retail gallons edged up 0.2% from the year-ago period to 1,208.4 million in the quarter under review but missed our estimate by 2%. Volumes on an SSS basis (or fuel gallons per store) declined 1.5% from the fourth quarter of 2022 to 237.9 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $2.97 per gallon, down from $3.19 per gallon a year ago.
Contribution from Merchandise increased 4.6% to $197.7 million on higher sales and a rise in unit margins from 19.1% a year ago to 19.4% in the fourth quarter of 2023. On an SSS basis, total merchandise contribution was up 3.2% year over year, primarily on the back of 7.1% higher tobacco margins. Meanwhile, merchandise sales increased 1.4% on an SSS basis, again due to an increase in tobacco sales.
The Zacks Rank #2 (Buy) company’s monthly fuel gallons were down 1.4% from the prior-year period, though merchandise sales increased 1.8% on an average per store monthly basis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Balance Sheet
As of Dec 31, Murphy USA — which opened 10 new retail locations in the quarter to take its store count to 1,733 — had cash and cash equivalents of $117.8 million and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 68.3%.
During the quarter, MUSA bought back shares worth $162 million.
Guidance
The company projects 2024 fuel volume in the range of 240-245 thousand gallons on an APSM basis. Further, Murphy USA’s 2024 guidance includes 30-35 new stores and 35-40 raze-and-rebuilds, $860-$880 million in merchandise margin contribution, and $400-$450 million in capital expenditures.
Some Key Refining Earnings
While we have discussed MUSA’s third-quarter results in detail, let’s see how some other refining companies have fared this earnings season.
Phillips 66 (PSX - Free Report) reported adjusted earnings per share of $3.09, comprehensively beating the Zacks Consensus Estimate of $2.37. The outperformance can be primarily attributed to lower costs. This was partially offset by PSX’s declining refining margins worldwide.
For the reported quarter, Phillips 66 generated $2.2 billion of net cash from operations, down from $4.8 billion a year ago. PSX’s capital expenditure and investments totaled $634 million. It paid out dividends of $457 million in the reported quarter. As of Dec 31, 2023, cash and cash equivalents were $3.3 billion. Meanwhile, Phillips 66 reported a total debt of $19.4 billion, reflecting a consolidated debt to capitalization of 34%.
Meanwhile, another refining giant — Valero Energy (VLO - Free Report) — reported better-than-expected fourth-quarter earnings. EPS of $3.55 per share came in above the Zacks Consensus Estimate of $2.95. This was on account of VLO’s lower costs. Bringing more good news, the company increased its quarterly cash dividend on common stock by 5% to $1.07 per share.
At the end of 2023, VLO had cash and cash equivalents of $5.4 billion, while the company’s total debt and finance lease obligations amounted to $11.5 billion. Valero’s fourth-quarter capital investment was $540 million. Of the total, $460 million was allotted for sustaining the business.
Finally, we have Marathon Petroleum’s (MPC - Free Report) fourth-quarter adjusted earnings per share of $3.98, which comfortably beat the Zacks Consensus Estimate of $2.36. The outperformance primarily reflects the stronger-than-expected performance of its key Refining & Marketing segment. Operating income of the segment totaled $1.2 billion, above the consensus mark of $812 million.
MPC’s total refined product sales volumes were 3,612 thousand barrels per day (mbpd), up from 3,532 mbpd in the year-ago quarter. Also, throughput rose from 2,895 mbpd in the year-ago quarter to 2,931 mbpd and outperformed the Zacks Consensus Estimate of 2,891 mbpd.