Murphy Oil Estimates Q3 Earnings

U.S. retail and marketing continuing operations generated earnings of $88.0 million in the third quarter of 2011 compared to earnings of $59.0 million in the 2010 quarter.

Murphy Oil Corp.’s net income in the third quarter of 2011 totaled $406.1 million ($2.09 per diluted share), which was double the net income of $202.8 million ($1.05 per diluted share) in the third quarter of 2010.

Net income in the third quarter of 2011 included income from discontinued operations of $70.4 million ($0.36 per diluted share), while the 2010 third quarter included income from discontinued operations of $5.4 million ($0.03 per diluted share).

Murphy Oil’s wholly-owned subsidiary sold the Superior, Wisconsin and Meraux, Louisiana refineries on Sept. 30, 2011 and Oct. 1, 2011, respectively. Beginning in the third quarter of 2011, the results of operations related to the Superior and Meraux refineries have been reported as discontinued operations for all periods presented. The after-tax net gain from disposal of the two refineries netted to $16.9 million.

Excluding discontinued operating results, income from continuing operations was $335.7 million ($1.73 per diluted share) in the third quarter of 2011 and $197.4 million ($1.02 per diluted share) in the same quarter of 2010. Results in 2011 improved in comparison to 2010 due to higher sales prices for crude oil production, stronger U.S. retail gasoline station profits and favorable impacts from transactions denominated in foreign currencies.

For the first nine months of 2011, net income totaled $986.6 million ($5.07 per diluted share) compared to $624.0 million ($3.24 per diluted share) for the same period in 2010. Net income included discontinued operations income of $132.4 million ($0.68 per diluted share) in the 2011 period and a loss from discontinued operations of $6.1 million ($0.03 loss per diluted share) in 2010. Income from continuing operations in the nine-month periods of 2011 and 2010 totaled $854.2 million ($4.39 per diluted share) and $630.1 million ($3.27 per diluted share), respectively.

Refining and Marketing
The Company’s refining and marketing business generated a quarterly profit from continuing operations of $68.9 million in the third quarter 2011 compared to a profit of $45.2 million in the 2010 third quarter. As previously noted, Murphy Oil is now presenting the results of its U.S. refining and associated terminal assets sold as discontinued operations. Those results are excluded from the R&M results of continuing operations above. The U.S. R&M segment now includes retail marketing operations, two ethanol production facilities and continued wholesale marketing and trading operations retained after the sale of U.S. refining operations. U.S. R&M continuing operations generated earnings of $88.0 million in the third quarter of 2011 compared to earnings of $59.0 million in the 2010 quarter. The earnings increase for this business in 2011 was principally a result of stronger retail marketing margins compared to the prior year. U.S. retail marketing margins averaged 20.0 cents per gallon in the 2011 quarter compared to 13.7 cents per gallon in the 2010 quarter. The U.K. R&M operations continued to suffer from weak N.W. European refining margins and posted a net loss of $19.1 million in the 2011 quarter. The comparative 2010 net loss was $13.8 million in the U.K.

 

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