Murphy USA (US:MUSA)2024-10-31 20:32Financial Performance - For Q3 2024, the company reported net income of $149.2 million, or $7.20 per diluted share, on revenue of $5.2 billion, compared to net income of $167.7 million, or $7.69 per diluted share, on $5.8 billion of revenue in Q3 2023[139]. - Year-to-date revenues for the nine months ended September 30, 2024, decreased by $0.9 billion, or 5.6%, compared to the same period in 2023, primarily due to 5.8% lower retail fuel sales prices[146]. - Total operating revenues for the nine months ended September 30, 2024, were $15,533.7 million, down from $16,460.3 million in 2023, representing a decrease of approximately 5.6%[154]. - The company reported a net income of $168.0 million for the three months ended September 30, 2024, compared to $187.2 million in 2023, a decrease of approximately 6.2%[154]. - Marketing segment net income for the nine months ended September 30, 2024, decreased primarily due to lower total fuel contribution and higher operating expenses[153]. - Net income in the Marketing segment for Q3 2024 decreased by $19.2 million to $168.0 million compared to Q3 2023, primarily due to lower total fuel contribution and increased operating expenses[162]. Fuel Contribution and Sales - Total fuel contribution was 32.6 cents per gallon in Q3 2024, down from 34.5 cents per gallon in Q3 2023, with retail fuel margin dollars increasing by 13.5% and retail fuel volumes increasing by 2.0% compared to Q3 2023[132]. - Total fuel contribution for the three months ended September 30, 2024, was $404.2 million, down from $419.0 million in 2023, a decrease of approximately 3.4%[157]. - Total fuel contribution for the nine-month period ended September 30, 2024, was $1.1 billion, a decrease of $34.1 million, or 3.1%, compared to the first nine months of 2023[169]. - Retail fuel margins increased by 11.2% in Q3 2024 to 31.9 cents per gallon, compared to 28.7 cents per gallon in the prior year[164]. - Petroleum product sales for the three months ended September 30, 2024, were $4,121.4 million, compared to $4,658.8 million in 2023, a decline of about 11.5%[159]. Merchandise Sales - Total merchandise sales for the three months ended September 30, 2024, were $1,082.4 million, up from $1,055.6 million in 2023, an increase of approximately 2.5%[160]. - Total merchandise sales increased by 3.0% to $3.2 billion in the nine months ended September 30, 2024, compared to $3.1 billion in the same period of 2023[170]. - Total merchandise sales in Q3 2024 were $1.1 billion, an increase of $26.8 million compared to Q3 2023, driven by a 7.8% increase in retail prices[165]. - Merchandise unit margin for the three months ended September 30, 2024, was 20.0%, slightly down from 20.1% in 2023[160]. - Higher merchandise contribution partially offset the decrease in net income for the nine-month period ended September 30, 2024[153]. Expenses and Costs - Store and other operating expenses increased by $10.5 million, or 4.0%, in Q3 2024 compared to Q3 2023, primarily due to higher employee-related expenses and maintenance costs[143]. - SG&A expenses for the first nine months of 2024 increased by $2.8 million, or 1.6%, compared to the same period in 2023, driven by higher wages and employee-related costs[149]. - Store and other operating expenses increased by $37.5 million in the current year compared to the same nine-month period of 2023, primarily due to employee-related expenses[171]. - Depreciation and amortization expense increased by $10.2 million, or 6.4%, in the first nine months of 2024 due to new larger store formats[172]. Capital Expenditures and Debt - The company anticipates total capital expenditures for the full year 2024 to range from approximately $500 million to $525 million, primarily funded through operating cash flow[135]. - Total capital spending for the three months ended September 30, 2024, was $146.9 million, compared to $77.8 million for the same period in 2023, representing an increase of 88.5%[206]. - For the nine months ended September 30, 2024, total capital spending was $352.1 million, up from $236.2 million in 2023, reflecting a year-over-year increase of 49.0%[206]. - As of September 30, 2024, total long-term debt was $1.82 billion, an increase from $1.78 billion at December 31, 2023, reflecting a rise of 2.3%[188]. - The outstanding balance of the term loan was $387 million at September 30, 2024, down from $390 million at December 31, 2023, indicating a slight reduction in debt[194]. Cash Flow and Shareholder Returns - Net cash provided by operating activities for the nine months ended September 30, 2024, was $598.9 million, an increase of $88.0 million, or 17.2%, compared to the same period in 2023[180]. - The company repurchased 698,855 shares for $320.4 million during the nine months ended September 30, 2024, compared to $172.7 million in the 2023 period, reflecting a significant increase in share repurchase activity[187]. - Cash dividend payments increased to $1.31 per common share, totaling $27.1 million in the nine months ended September 30, 2024, up from $1.14 per share and $24.7 million in the same period of 2023, indicating a growth of 9.7% in total dividends[185]. - The company declared a quarterly cash dividend of $0.48 per common share on October 24, 2024, which annualizes to $1.92 per share[186]. Risk Factors and Future Outlook - The company anticipates future risks related to geopolitical events, supply chain disruptions, and changes in consumer demand impacting financial results[209]. - The company has exposure to interest rate risks related to a floating rate term loan of $387 million and a revolving credit facility with $41.0 million outstanding as of September 30, 2024[212]. - A 10% increase or decrease in the respective benchmark price of commodities underlying derivative contracts would have been immaterial to the company[211]. - The company has made limited use of derivative instruments to manage commodity price risks, which are closely monitored by senior management[210]. - There has been no material update to the company's critical accounting policies since the last annual report[207].