Jason Miles
Lower retail gasoline margins hurt Murphy USA’s revenue and profitability, but the El Dorado-based operator of convenience stores nevertheless had a successful first quarter.
Murphy USA announced a first quarter net income of $106.3 million on revenues of $5.077 billion on Tuesday, May 2, down from a net income of $152.4 million on revenues of $5.118 billion in the same period last year.
Comparatively to $6.08 a year ago, diluted earnings per share were $4.80.
The first quarter’s total fuel contribution, which is determined by retail fuel margin plus product supply and wholesale performance, was 28.9 cpg (cents per gallon), down from 34.0 cpg in the corresponding period in 2022.
“Murphy USA performance was exceptional during the first quarter, delivering results aligned with our high expectations and future value creation potential,” said President and CEO Andrew Clyde.
“Continued volume growth and share gains were added to our view of inherently stronger industry margins, which are supported by all-in fuel margins of 28.9 cents per gallon. great merchandise performance resulted from significant year-over-year growth inside the stores, which was driven by great fuel performance and strong customer visitation. We believe the next five years of high-return organic growth, strong fundamentals, and resulting free cash flow make a compelling case for continuing share repurchase, as evidenced by our announcement of a new up to $1.5 billion authorization following the completion of our $1 billion program, which we expect to finish in 2023. New investments are currently underway to help better serve our customers and grow future earnings.
Other noteworthy aspects of the quarter included:
- volumes on a same-store sales basis increased 1.4%, and total retail gallons increased by 4.9% in Q1 2023 compared to Q1 2022.
- In Q1 2023, merchandise contribution dollars climbed by 6.5% to $187.1 million on average unit margins of 19.4% from $175.7 million on unit margins of 19.7% in the corresponding period the previous year.
- At an average price of $279.67 per share during the first quarter of 2023, the corporation bought back about 48,800 common shares for $13.7 million.
The board of directors of Murphy USA approved a new share repurchase program of up to $1.5 billion that will start once the present $1 billion authorization expires and be carried out by December 31, 2028.
On Tuesday, trading in shares of Murphy USA (NYSE: MUSA) came to an end at $276.14. Over the last 52 weeks, the company’s stock has fluctuated between $217.39 and $323.00.
On March 31, 2023, Murphy USA reported 1,720 stores.
