Murphy USA Q3 Earnings Top Estimates as Merchandise Shines

Motor fuel retailer Murphy USA Inc. MUSA announced third-quarter 2025 adjusted earnings per share of $7.25, which beat the Zacks Consensus Estimate of $6.60 and compared favorably with the year-ago profit of $7.20. The outperformance was primarily on the back of higher merchandise results.

However, Murphy USA’s operating revenues of $5.1 billion fell 2.5% year over year and missed the consensus mark by $104 million due to lower-than-expected petroleum product sales.

Revenues from petroleum product sales came in at $3.9 billion, well below our estimate of $4.2 billion and down 4.8% from the third quarter of 2024. On the other hand, merchandise sales, at $1.1 billion, were up 3.7% year over year.  

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 dropped 4.8% year over year to $384.8 million due to lower retail contribution and margin contraction. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 30.7 cents per gallon, down 5.8% from the third quarter of 2024.

Retail fuel contribution fell 10.4% year over year to $354.5 million as margins narrowed to 28.3 cents per gallon from 31.9 cents in the corresponding period of 2024. Retail gallons improved 1.2% from the year-ago period to 1,254.3 million and beat our estimate of 1,233 million. Volumes on an SSS basis (or fuel gallons per store) deteriorated 1.4% from the third quarter of 2024 to 241.7 thousand.

Contribution from Merchandise was up 11.2% to $241.2 million on higher sales, while unit margins increased to 21.5% from 20% a year ago. On an SSS basis, total merchandise contribution improved 8.3% year over year, primarily due to 18% higher nicotine margins. Moreover, merchandise sales edged up 0.7% on an SSS basis, due to a gain in nicotine as well as non-nicotine sales.

The Zacks Rank #4 (Sell) company’s monthly fuel gallons fell 1.8% from the prior-year period, but merchandise sales increased 1% on an average per-store monthly basis. 

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Balance Sheet

As of Sept. 30, Murphy USA — which opened eight new retail locations in the quarter and closed two outlets to take its store count to 1,772 — had cash and cash equivalents of $42.8 million and long-term debt (including lease obligations) of $2.2 billion, with a debt-to-capitalization of 80.3%.

During the quarter, MUSA bought back shares worth $221.4 million.

New Buyback Authorization and Dividend Hike

Murphy USA board authorized a new $2 billion share repurchase program effective after completion of the current $1.5 billion plan (with $337 million remaining), expiring Dec. 31, 2030.

It also declared a quarterly dividend of 63 cents per share ($2.52 annualized), marking a 19% increase from the Q3 2025 dividend.

Some Key Refining Earnings

While we have discussed MUSA’s third-quarter results in detail, let’s see how some other refining companies have fared this earnings season.

Valero Energy VLO reported adjusted earnings of $3.66 per share, which beat the Zacks Consensus Estimate of $2.95. The bottom line also improved from the year-ago quarter’s level of $1.16 per share. Valero’s better-than-expected quarterly results can be primarily attributed to an increase in refining margins, higher ethanol margins and lower total cost of sales. The positives were partially offset by a decline in renewable diesel sales volumes.

Valero’s third-quarter capital investment totaled $409 million, of which $364 million was allocated toward sustaining the business. The company had cash and cash equivalents of $4.8 billion at the end of the third quarter. As of Sept. 30, 2025, Valero had a total debt of $8.4 billion and finance-lease obligations of $2.2 billion.

Another refining giant, Phillips 66 PSX, reported adjusted earnings of $2.52 per share, topping the Zacks Consensus Estimate of $2.07 and improving from the year-ago quarter’s profit of $2.04. Phillips 66’s outperformance can be attributed to higher realized refining margins worldwide. However, lower contributions from the chemical segment partially offset the positives.

Phillips 66 generated $1.2 billion in net cash from operations in the reported quarter, an increase from $1.1 billion in the year-ago period. The company’s capital expenditure and investments totaled $541 million. It paid out dividends of $484 million in the third quarter. As of Sept. 30, 2025, cash and cash equivalents were $2 billion. Total debt was $21.8 billion, reflecting a debt-to-capitalization of 44%.

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This article originally published on Zacks Investment Research (zacks.com).

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