A month has gone by since the last earnings report for Murphy USA (MUSA). Shares have added about 5.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Murphy USA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Murphy USA Q4 Earnings Beat Estimates as Fuel Margins Rise
Motor fuel retailer Murphy USA announced fourth-quarter 2025 adjusted earnings per share of $7.53, which beat the Zacks Consensus Estimate of $6.67 and compared favorably with the year-ago profit of $6.96. The outperformance was primarily on the back of higher merchandise results.
Meanwhile, Murphy USA’s operating revenues of $4.7 billion rose 0.7% year over year but missed the consensus mark by $57 million due to lower-than-expected petroleum product sales.
Revenues from petroleum product sales came in at $3.6 billion, below our estimate of $3.7 billion and down 0.6% from the fourth quarter of 2024. On the other hand, merchandise sales, at $1.1 billion, were up 3.7% year over year.
Key Takeaways
MUSA’s total fuel contribution rose 8.9% year over year to $423.6 million due to higher retail contribution and margin expansion. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 34.3 cents per gallon, up 5.5% from the fourth quarter of 2024.
Retail fuel contribution improved 10.8% year over year to $383 million as margins widened to 31 cents per gallon from 28.9 cents in the corresponding period of 2024. Retail gallons increased 3.1% from the year-ago period to 1,234.2 million and beat our estimate of 1,205 million. Volumes on an SSS basis (or fuel gallons per store) edged up 0.3% from the fourth quarter of 2024 to 234.3 thousand.
Contribution from Merchandise was up 2.1% to $213.2 million on higher sales, though unit margins fell to 19.6% from 19.9% a year ago. On an SSS basis, total merchandise contribution was up a marginal 0.4% year over year, primarily due to 2.7% higher non-nicotine margins. Moreover, merchandise sales edged up 0.5% on an SSS basis, due to a gain in nicotine as well as non-nicotine sales.
The company’s monthly fuel gallons fell 0.3% from the prior-year period, but merchandise sales increased 0.5% on an average per-store monthly basis.
Balance Sheet
As of Dec. 31, Murphy USA — which opened 29 new retail locations in the quarter and closed one outlet to take its store count to 1,800 — had cash and cash equivalents of $28.9 million and long-term debt (including lease obligations) of $2.2 billion, with a debt-to-capitalization of 77.6%.
During the quarter, MUSA bought back shares worth $67.5 million.
2026 Guidance
Murphy USA’s 2026 guidance calls for continued unit growth and disciplined profitability. The company plans to open 45 to 55 new stores and complete up to 30 raze-and-rebuild projects. Merchandise contribution is guided to $890-$900 million, while capital expenditures are expected to total $475 million to $525 million for the year.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates revision.
VGM Scores
At this time, Murphy USA has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock has a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Murphy USA has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Murphy USA Inc. (MUSA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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