Murphy USA Inc. (NYSE: MUSA) reported Q4 EPS of $1.54, $0.04 better than the analyst estimate of $1.50. Revenue for the quarter came in at $3.46 billion versus the consensus estimate of $3.58 billion.

Key Highlights:

• Net income was $47.6 million, or $1.54 per diluted share, in Q4 2019 compared to net income of $77.5 million, or $2.38 per diluted share, in Q4 2018. This decrease in net income was primarily due to a lower total fuel contribution. For 2019, net income was $154.8 million, or $4.86 per diluted share, compared to 2018 net income of $213.6 million, or $6.48 per diluted share.
• Total fuel contribution (retail fuel margin plus product supply and wholesale ("PS&W") results including RINs) for Q4 2019 was 17.1 cpg compared to 20.0 cpg in Q4 2018. For the year, total fuel contribution was 16.1 cpg in 2019 compared to 16.2 cpg in 2018.
• Total retail gallons decreased 1.6% for the network during Q4 2019 and volumes on a same store sales ("SSS") basis decreased 3.4%, while for the year, retail gallons increased 3.4% to 4.4 billion gallons and increased 1.2% on a SSS basis.
• Merchandise contribution dollars grew 3.0% during Q4 2019 to $105.2 million. For the current year, merchandise contribution dollars were up 4.8% to $419.4 million on average unit margins of 16.0%.
• During Q4 2019, 10 new stores opened and 10 raze-and-rebuild sites re-opened. For the year, 17 new stores were opened and in addition, 27 raze-and-rebuild locations re-opened. The year-end store count was 1,489.
• Common shares repurchased during Q4 2019 were 0.3 million for $26.6 million at an average price of $88.73 per share. For the year, 1.9 million shares were repurchased for $165.8 million at an average of $87.35 per share.

"Our Q4 results rounded out an exceptional 2019, where Murphy USA's strategic initiatives drove higher per store fuel volumes, record merchandise contribution and better new store performance while maintaining our cost leadership position," said President and CEO Andrew Clyde. "We expect earnings growth and other share price drivers that we control to continue as we enter 2020 with momentum along with a strong balance sheet and leadership team."

Management's annual guidance for 2020 reflects the Company's economic and market environment assessment, business improvement initiatives and known potential headwinds. Key 2020 guidance ranges include the following assumptions and are subject to the uncertainties noted below:

Organic Growth:

• New store additions and raze-and-rebuild sites reflect continuation of a disciplined capital approach to the highest return opportunities

Fuel Contribution:

• Per store fuel volumes are expected to build off of 2019 improvements and strategies

Fuel Breakeven:

• Merchandise contribution represents a range of outcomes based on management's expectations around higher merchandise sales
• Store operating expenses per site, before credit card fees, are expected to be flat to slightly higher and approach the inflation rate on an annual basis reflecting ongoing shift in format mix
• Beginning in 2020, this metric will be restyled as station operating expense per site, before rent and credit card fees and the guidance has been adjusted accordingly. For the full year 2019, rent contributed 50 basis points of the year-over-year increase

Corporate Costs:

• SG&A costs reflect continued investments in IT related productivity enhancements and other corporate initiatives to help drive profitability, reduce costs where able, and improve the company's long-term competitive position, subject to timing and allocation of resources
• The effective tax rate in 2020 is expected to be in a range of 24% to 26%

Capital Allocation:

• Capital expenditures reflect new store growth, raze-and-rebuild activity, store maintenance and improvements, land acquisition, and continued implementation of various corporate infrastructure projects

The Company does not provide a projected range of all-in fuel margin, Adjusted EBITDA, or Net income. However, for modeling purposes only, if all-in fuel margin approximates 16.2 cpg, management would expect the business to generate net income of $162 million and Adjusted EBITDA of about $440 million using the midpoint of the provided guided ranges above.

For earnings history and earnings-related data on Murphy USA Inc. (MUSA) click here.