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Why Is Murphy USA (MUSA) Down 3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Murphy USA (MUSA - Free Report) . Shares have lost about 3% 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 catalysts.
Murphy USA’s Q4 Earnings and Revenues Top Estimates
Murphy USA announced fourth-quarter 2021 earnings per share of $4.23, which beat the Zacks Consensus Estimate of $3.68 and nearly doubled from the year-earlier bottom line of $2.16. The outperformance could be attributed to a rise in the retail gasoline price, contribution from the QuickChek acquisition and a higher retail margin of 27.7 cents per gallon that was up 38.9% year over year.
Meanwhile, Murphy USA’s operating revenues of $4.8 billion soared 66.6% year over year and beat the consensus mark by $111 million primarily due to improved petroleum product sales.
Revenues from petroleum product sales came in at $3.8 billion, up 82.2% from the fourth quarter of 2020 and 2% above the Zacks Consensus Estimate. Merchandise sales, at $927.7 million, rose 24.7% year over year and outperformed the Zacks Consensus Estimate of $911 million.
Key Takeaways
MUSA’s total fuel contribution rose 53.1% year over year to $307.4 million due to margin expansion and higher volumes. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 27.5 cents per gallon, which improved nearly 39% from the fourth quarter of 2020.
Retail fuel contribution increased 83.5% year over year to $285.3 million as margins widened to 25.5 cents per gallon from 15.4 cents in the corresponding period of 2020. Retail gallons rose 10.5% from the year-ago period to 1,119.5 million in the quarter under review and edged past the Zacks Consensus Estimate by 0.5%. Volumes on an SSS basis (or fuel gallons per store) improved 2.7% from the fourth quarter of 2020 to 229.6 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.05 per gallon, surging from $1.87 per gallon a year ago.
Contribution from Merchandise increased 57.2% to $181.4 million on higher sales and better unit margins, which, at 19.6%, moved up from the year-ago period’s 15.5%. On an SSS basis, total merchandise contribution was up 3.7% year over year on the back of 11.3% higher non tobacco margins. Meanwhile, merchandise sales fell 1% on an SSS basis due to a decrease of 3.4% in tobacco sales that was partly offset by a 5.4% gain in non-tobacco sales.
Fuel gallons were up 2.7% from the prior-year period while merchandise sales increased 11.4% on an average per store month basis.
Balance Sheet
As of Dec 31, Murphy USA — which opened 12 new retail locations in the quarter and closed two to take its store count to 1,679 — had cash and cash equivalents of $256.4 million, and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 69%.
During the quarter, MUSA bought back shares worth $123.5 million.
Guidance
The company projects 2022 fuel volume in a range of 235 to 245 thousand gallons on the APSM basis. Further, Murphy USA’s 2022 guidance includes up to 45 new stores and up to 35 raze-and-rebuilds, $740-$760 million in merchandise margin contribution, and $350-$400 million in capital expenditures.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Murphy USA has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile 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
Murphy USA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Murphy USA (MUSA) Down 3% Since Last Earnings Report?
A month has gone by since the last earnings report for Murphy USA (MUSA - Free Report) . Shares have lost about 3% 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 catalysts.
Murphy USA’s Q4 Earnings and Revenues Top Estimates
Murphy USA announced fourth-quarter 2021 earnings per share of $4.23, which beat the Zacks Consensus Estimate of $3.68 and nearly doubled from the year-earlier bottom line of $2.16. The outperformance could be attributed to a rise in the retail gasoline price, contribution from the QuickChek acquisition and a higher retail margin of 27.7 cents per gallon that was up 38.9% year over year.
Meanwhile, Murphy USA’s operating revenues of $4.8 billion soared 66.6% year over year and beat the consensus mark by $111 million primarily due to improved petroleum product sales.
Revenues from petroleum product sales came in at $3.8 billion, up 82.2% from the fourth quarter of 2020 and 2% above the Zacks Consensus Estimate. Merchandise sales, at $927.7 million, rose 24.7% year over year and outperformed the Zacks Consensus Estimate of $911 million.
Key Takeaways
MUSA’s total fuel contribution rose 53.1% year over year to $307.4 million due to margin expansion and higher volumes. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 27.5 cents per gallon, which improved nearly 39% from the fourth quarter of 2020.
Retail fuel contribution increased 83.5% year over year to $285.3 million as margins widened to 25.5 cents per gallon from 15.4 cents in the corresponding period of 2020. Retail gallons rose 10.5% from the year-ago period to 1,119.5 million in the quarter under review and edged past the Zacks Consensus Estimate by 0.5%. Volumes on an SSS basis (or fuel gallons per store) improved 2.7% from the fourth quarter of 2020 to 229.6 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.05 per gallon, surging from $1.87 per gallon a year ago.
Contribution from Merchandise increased 57.2% to $181.4 million on higher sales and better unit margins, which, at 19.6%, moved up from the year-ago period’s 15.5%. On an SSS basis, total merchandise contribution was up 3.7% year over year on the back of 11.3% higher non tobacco margins. Meanwhile, merchandise sales fell 1% on an SSS basis due to a decrease of 3.4% in tobacco sales that was partly offset by a 5.4% gain in non-tobacco sales.
Fuel gallons were up 2.7% from the prior-year period while merchandise sales increased 11.4% on an average per store month basis.
Balance Sheet
As of Dec 31, Murphy USA — which opened 12 new retail locations in the quarter and closed two to take its store count to 1,679 — had cash and cash equivalents of $256.4 million, and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 69%.
During the quarter, MUSA bought back shares worth $123.5 million.
Guidance
The company projects 2022 fuel volume in a range of 235 to 245 thousand gallons on the APSM basis. Further, Murphy USA’s 2022 guidance includes up to 45 new stores and up to 35 raze-and-rebuilds, $740-$760 million in merchandise margin contribution, and $350-$400 million in capital expenditures.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Murphy USA has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile 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
Murphy USA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.