Murphy USA on Tuesday reported a profit of $168.9 million for the second quarter of 2020, shattering the $32.7 million profit reported for the same period a year ago, despite the severe reduction in travel during the early weeks of the coronavirus pandemic.
Earnings per share for the quarter, which ended June 30, were $5.73, up from $1.01 a year ago.
The earnings report, which was released shortly before markets opened Tuesday, largely exceeded Wall Street expectations.
Based in El Dorado, the retail fuel and convenience-store chain reported revenue of $2.38 billion for the quarter, down from $3.8 billion for the second quarter of 2019.
The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of $4.31 per share and revenue of $2.57 billion.
"Murphy USA's record second quarter performance once again demonstrated the competitive advantages of our distinctive business model and customer positioning," Andrew Clyde, the company president and chief executive officer, said in a news release that accompanied the earnings report.
"Fuel margins significantly outpaced volume declines due to COVID-19 related demand destruction even as commodity prices rose sharply in May and June," he said.
Retail fuel margins of 31.7 cents per gallon in the second quarter outpaced the fuel margins of a year ago by 136.6%, the company said. "Retail fuel volumes were lower during the quarter compared to prior year volumes primarily due to stay-at-home restrictions in our areas of operation which began lifting in most areas toward the end of the quarter."
"Total merchandise sales increased 12.2% to $118.4 million in the second quarter from $105.5 million in the second quarter 2019, due to higher sales across the chain," the company said, with single-store sales increasing nearly 12% from a year ago.
Tobacco sales increased by 19.2%. Non-tobacco contribution improved 1.8% primarily through an uptick in the sale of lottery tickets and general merchandise.
"As volume recovers in July to over 90 percent of prior year levels reflecting our every-day low price positioning and more favorable geographies and locations, robust fuel margins continue to generate higher than normal fuel contribution for Murphy USA," Clyde said. "Merchandise sales and margins have kept record pace as prior and current investments in tobacco categories led to further acceleration of additional market share gains while innovation in general merchandise and recovering traffic boosted non-tobacco categories."
The company reported operating expenses of $2.1 million for the quarter, down from $3.7 million for the second quarter of 2019.
Cash balances as of June 30 totaled $403.6 million. The company reported 29,177,631 common shares outstanding as of June 30.
Murphy USA opened three stores, reopened eight raze-and-rebuild sites and sold all nine of its stores in Minnesota in the second quarter, taking its store count to 1,485. Seventeen stores are under construction, including 11 new retail sites and six kiosks undergoing raze-and-rebuild that will return to operation as 1,400-square-foot stores.