Murphy USA Reports Strong First Quarter

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Murphy USA Inc., the gasoline and convenience store company based in El Dorado, reported better-than-expected first-quarter revenue and income Friday, a development that buoyed its stock price.

Murphy USA’s net income of $89.3 million in the first three months of 2020, $2.92 per diluted share, was a boom compared to same-quarter last year, when the Murphy Oil Corp. spinoff had income of just $5.3 million, or 16 cents a share.

Revenue of $3.1 billion was up nearly 2% year over year, beating analysts’ expectations. Shares of the company (NYSE: MUSA) were trading up more than 3% Friday to $106.10. 

But CEO Andrew Clyde said in a company statement that challenges lie ahead.

“Despite exceptional first quarter performance, our business faces unprecedented risks and unknown challenges stemming from COVID-19 as the resiliency of our economy, our public health system, and our citizens are put to the test,” Clyde said.

Near-term demand is uncertain, the CEO said, but he pointed to Murphy USA’s strong balance sheet and an agile business model as indicators that the company “is well-positioned to continue serving our customers, our employees and our shareholders in this environment.”

Total retail gallons sold were up 1.2% in the quarter compared to last year, and merchandise dollars rose 10.3% to $107 million compared to 2019.

“While near-term demand remains uncertain, our customers continue to rely on us for their core fuel and merchandise needs and we remain committed to serving them,” Clyde said. “We have a strong balance sheet, a resilient and agile business model, and the levers to pull to preserve liquidity if needed. As such, the long-term view of our value creation potential remains unchanged, despite the transitory demand impacts we are seeing currently.” 

The company attributed the financial surge, generally, to a “higher all-in fuel contribution,” surging merchandise sales and a higher total volume of retail fuel. Those positives were partially offset by higher operating expenses and SG&A expenses.

Clyde also offered thanks to the company’s store employees, “who have risen to the occasion and stood on the front-line during this crisis, continuing to provide clean, safe, and friendly service to our customers, despite the difficult environment. I am proud to see the Murphy USA spirit is as resilient as our business.”