This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Murphy Oil Announces Preliminary Quarterly Earnings

Stocks in this article: MUR

Refining and Marketing (Downstream)

The Company’s refining and marketing business generated a profit from continuing operations of $42.8 million in the third quarter 2012 compared to a profit of $68.9 million in the 2011 third quarter. As previously noted, the Company sold two U.S. refineries and certain associated marketing terminals in 2011 and has reported these as discontinued operations. Those results are excluded from the Downstream results from continuing operations above. Continuing operations for the U.S. Downstream segment now includes the retail marketing business, two ethanol production facilities and wholesale marketing and trading operations retained after the sale of U.S. refining operations. On October 16, 2012, the Company announced a plan to separate its U.S. Downstream business into an independent company in 2013.

U.S. Downstream continuing operations generated a profit of $17.3 million in the third quarter of 2012 compared to a profit of $88.0 million in the 2011 quarter. The earnings decline for this business in 2012 was principally a result of weaker margins for both retail marketing and ethanol production operations compared to the prior year. U.S. retail marketing margins averaged 10.3 cents per gallon in the 2012 quarter compared to 20.0 cents per gallon in the 2011 quarter. Wholesale gasoline prices rose significantly in the third quarter 2012 and the retail marketing operation was unable to fully pass on this cost increase to its retail customers. The operating results at the two U.S. ethanol production facilities in 2012 were significantly weaker than the prior year due to crush spreads that were squeezed by high corn prices in the just completed quarter. The U.K. Downstream operations benefited from much stronger refining margins in the 2012 quarter compared to the prior year, as this business generated income of $25.5 million in the 2012 quarter compared to a loss of $19.1 million in the 2011 quarter. Unit margins in the U.K. in the 2012 quarter were more than $5.00 per barrel better than the prior year.

Downstream Metrics

Three Mos. Ended Nine Mos. Ended
September 30 September 30





U.S. Retail Fuel Margins – Per gallon $ 0.103 0.200 0.125 0.165
U.S. Retail Merchandise Sales – Per store month $ 159,424 164,953 157,004 158,385
U.K. Refinery Inputs – Bbls. per day 132,932 138,041 132,282 134,346
U.K. R&M Unit Margins – Per Bbl. $ 3.44 (1.66 ) 1.85 (1.37 )

Total Petroleum and Other Product Sales – Bbls. per day*

471,119 594,619 468,416 586,928

*Includes 170,609 bbls. per day in the 2011 three-month period and 163,597 bbls. per day in the 2011 nine-month period related to discontinued operations.



The Corporate function incurred net costs of $35.0 million in the third quarter of 2012, significantly unfavorable to the net benefit of $5.0 million in the 2011 third quarter. The unfavorable variance in 2012 was primarily related to after-tax losses of $12.6 million in the current quarter for transactions denominated in foreign currencies. The 2011 quarter included an after-tax benefit of $28.3 million from foreign currency transactions. The foreign currency charge in the current year was primarily attributable to a strengthening of the Malaysian ringgit against the U.S. dollar, which led to increased costs in U.S. dollar terms for income tax liabilities that are to be paid in the local currency. The Malaysian ringgit weakened against the U.S. dollar in the 2011 third quarter, which lowered income tax liabilities in U.S. dollar terms in the prior year. The 2012 quarter had lower net interest expense compared to the prior year quarter, primarily associated with less interest expense incurred coupled with higher amounts of interest capitalized to oil development projects. Administrative costs were also higher in 2012 than 2011, with the increase primarily related to additional costs for employee compensation.

3 of 8

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs