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Murphy (MUSA) Q2 Earnings Beat as Margins Go Up, Sales Miss
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Motor fuel retailer Murphy USA Inc. (MUSA - Free Report) announced second-quarter 2024 earnings per share of $6.92, which beat the Zacks Consensus Estimate by a penny and came in higher than the year-ago profit of $6.02. The outperformance primarily reflects higher fuel margins.
However, Murphy USA’s operating revenues of $5.4 billion fell 2.4% year over year and missed the consensus mark by $194 million due to tepid petroleum product sales.
Revenues from petroleum product sales came in at $4.3 billion, marginally above our estimate, though down 2.5% from the second quarter of 2023. On the other hand, merchandise sales, at $1.1 billion, rose 3% year over year and came 2.6% ahead of our estimate.
MUSA’s total fuel contribution rose 6.7% year over year to $390.3 million due to margin expansion. Moreover, total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 31.7 cents per gallon, 7.5% higher than the second quarter of 2023.
Retail fuel contribution increased 9.1% year over year to $365.2 million as margins widened to 29.7 cents per gallon from 27 cents in the corresponding period of 2023. Retail gallons edged down 0.6% from the year-ago period to 1,231.6 million in the quarter under review and missed our estimate of 1,241.8 million. Volumes on an SSS basis (or fuel gallons per store) declined 0.4% from the second quarter of 2023 to 244.3 thousand.
Contribution from Merchandise increased 4.7% to $216.5 million on higher sales and a rise in unit margins from 19.7% a year ago to 20% in the second quarter of 2024. On an SSS basis, total merchandise contribution was up 5% year over year, primarily on the back of 12.1% higher tobacco margins. Meanwhile, merchandise sales increased 3.1% on an SSS basis, again due to an increase in tobacco sales.
The Zacks Rank #3 (Hold) company’s monthly fuel gallons fell slightly from the prior-year period, though merchandise sales increased 3.3% on an average per store monthly basis.
As of Jun 30, Murphy USA — which opened three new retail locations in the quarter to take its store count to 1,736 — had cash and cash equivalents of $79.8 million and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 68.7%.
During the quarter, MUSA bought back shares worth $107.1 million.
Some Key Refining Earnings
While we have discussed MUSA’s second-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 $2.31, which beat the Zacks Consensus Estimate of $2.12. The outperformance can be primarily attributed to record natural gas liquids (NGL) volumes in the Midstream segment and refining crude utilization hitting a five-year high. This was partially offset by higher total costs and expenses.
For the reported quarter, Phillips 66 generated $2.1 billion of net cash from operations, significantly higher than $955 million a year ago. The company’s capital expenditure and investments totaled $367 million. It paid out dividends of $485 million in the second quarter. As of Jun 30, 2024, PSX’s cash and cash equivalents were $2.4 billion. Total debt was $19.9 billion, reflecting a debt-to-capitalization of 43.4%.
Meanwhile, another refining giant — Valero Energy (VLO - Free Report) — reported second-quarter 2024 adjusted earnings of $2.71 per share, which beat the Zacks Consensus Estimate of $2.61, driven by an increase in refining throughput volumes. Adjusted operating income in the Refining segment totaled $1.2 billion, down from $2.4 billion in the year-ago quarter. The figure also missed our estimate of $2.1 billion.
Valero’s total cost of sales increased to $33.1 billion from the year-ago figure of $31.5 billion. The figure is also above our estimate of $31.3 billion, primarily due to higher material costs. The second-quarter capital investment totaled $420 million, of which $329 million was allotted for sustaining the business.
Finally, we have Marathon Petroleum’s (MPC - Free Report) second-quarter adjusted earnings per share of $4.12, which comfortably beat the Zacks Consensus Estimate of $3.04. The outperformance primarily reflects the stronger-than-expected performance of its Refining & Marketing segment. Operating income of the segment totaled $1.3 billion, surpassing the consensus mark of $1 billion.
Marathon Petroleum’s total refined product sales volumes were 3,742 thousand barrels per day (mbpd), down from 3,581 mbpd in the year-ago quarter. But throughput rose from 2,925 mbpd in the year-ago quarter to 3,065 mbpd and outperformed the Zacks Consensus Estimate of 2,968 mbpd. MPC’s operating costs per barrel decreased from $5.15 in the year-ago quarter to $4.97.
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Murphy (MUSA) Q2 Earnings Beat as Margins Go Up, Sales Miss
Motor fuel retailer Murphy USA Inc. (MUSA - Free Report) announced second-quarter 2024 earnings per share of $6.92, which beat the Zacks Consensus Estimate by a penny and came in higher than the year-ago profit of $6.02. The outperformance primarily reflects higher fuel margins.
However, Murphy USA’s operating revenues of $5.4 billion fell 2.4% year over year and missed the consensus mark by $194 million due to tepid petroleum product sales.
Revenues from petroleum product sales came in at $4.3 billion, marginally above our estimate, though down 2.5% from the second quarter of 2023. On the other hand, merchandise sales, at $1.1 billion, rose 3% year over year and came 2.6% ahead of our estimate.
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 6.7% year over year to $390.3 million due to margin expansion. Moreover, total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 31.7 cents per gallon, 7.5% higher than the second quarter of 2023.
Retail fuel contribution increased 9.1% year over year to $365.2 million as margins widened to 29.7 cents per gallon from 27 cents in the corresponding period of 2023. Retail gallons edged down 0.6% from the year-ago period to 1,231.6 million in the quarter under review and missed our estimate of 1,241.8 million. Volumes on an SSS basis (or fuel gallons per store) declined 0.4% from the second quarter of 2023 to 244.3 thousand.
Contribution from Merchandise increased 4.7% to $216.5 million on higher sales and a rise in unit margins from 19.7% a year ago to 20% in the second quarter of 2024. On an SSS basis, total merchandise contribution was up 5% year over year, primarily on the back of 12.1% higher tobacco margins. Meanwhile, merchandise sales increased 3.1% on an SSS basis, again due to an increase in tobacco sales.
The Zacks Rank #3 (Hold) company’s monthly fuel gallons fell slightly from the prior-year period, though merchandise sales increased 3.3% 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 Jun 30, Murphy USA — which opened three new retail locations in the quarter to take its store count to 1,736 — had cash and cash equivalents of $79.8 million and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 68.7%.
During the quarter, MUSA bought back shares worth $107.1 million.
Some Key Refining Earnings
While we have discussed MUSA’s second-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 $2.31, which beat the Zacks Consensus Estimate of $2.12. The outperformance can be primarily attributed to record natural gas liquids (NGL) volumes in the Midstream segment and refining crude utilization hitting a five-year high. This was partially offset by higher total costs and expenses.
For the reported quarter, Phillips 66 generated $2.1 billion of net cash from operations, significantly higher than $955 million a year ago. The company’s capital expenditure and investments totaled $367 million. It paid out dividends of $485 million in the second quarter. As of Jun 30, 2024, PSX’s cash and cash equivalents were $2.4 billion. Total debt was $19.9 billion, reflecting a debt-to-capitalization of 43.4%.
Meanwhile, another refining giant — Valero Energy (VLO - Free Report) — reported second-quarter 2024 adjusted earnings of $2.71 per share, which beat the Zacks Consensus Estimate of $2.61, driven by an increase in refining throughput volumes. Adjusted operating income in the Refining segment totaled $1.2 billion, down from $2.4 billion in the year-ago quarter. The figure also missed our estimate of $2.1 billion.
Valero’s total cost of sales increased to $33.1 billion from the year-ago figure of $31.5 billion. The figure is also above our estimate of $31.3 billion, primarily due to higher material costs. The second-quarter capital investment totaled $420 million, of which $329 million was allotted for sustaining the business.
Finally, we have Marathon Petroleum’s (MPC - Free Report) second-quarter adjusted earnings per share of $4.12, which comfortably beat the Zacks Consensus Estimate of $3.04. The outperformance primarily reflects the stronger-than-expected performance of its Refining & Marketing segment. Operating income of the segment totaled $1.3 billion, surpassing the consensus mark of $1 billion.
Marathon Petroleum’s total refined product sales volumes were 3,742 thousand barrels per day (mbpd), down from 3,581 mbpd in the year-ago quarter. But throughput rose from 2,925 mbpd in the year-ago quarter to 3,065 mbpd and outperformed the Zacks Consensus Estimate of 2,968 mbpd. MPC’s operating costs per barrel decreased from $5.15 in the year-ago quarter to $4.97.