Boston, MA 05/09/2014 (wallstreetpr) – After reporting 1Q2014 results that showed a significant decline from a year earlier, the retail gas station company Murphy USA Inc (NYSE:MUSA) said all is not lost for its shareholders. The company announced shares repurchase program for this year that it believes is to be a meaningful statement to its shareholders.
The company’s board has approved a $50 million shares repurchase program that it expects to complete this year. However, the number of shares and the timing of the repurchase remains the prerogative of the management. The company also said that a number of factors will come into play in determining the number of shares to be bought back and when that exercise is appropriate.
The declaration of a share repurchase program comes early in the life of the company, and the management believes that the move leaves no doubt about the strong execution in the company.
Competitive market
Murphy USA Inc (NYSE:MUSA)’s lackluster 1Q was impacted by high wholesale prices that in turn trimmed retail margins. However, the company also sees competition as a threat to its operations but said that strategies are in place to beat competition. The company expects to integrate offers with a view of leveraging its main stores. The offers might come in the form of incentives to customers as it did in the previous year where it offered a 10-cent discount per gallon fuel with the purchase of either PepsiCo Inc (NYSE:PEP) or Coca-Cola Company (NYSE:KO) products.
Developments
In addition to working on the strategies to counter market competition, the CEO Andrew Clyde said the company intends to build new sites this year. As such, the company has plans for up to 70 new sites besides rebuilding oil ones to match its model of larger 1,200-SF format. Furthermore, the company is working on the diversification of its merchandise mix. As such, the company intends to break away from its over reliance on tobacco sales for its non-fuel revenue. Therefore, the Murphy USA Inc (NYSE:MUSA) might improve its non-tobacco offering.
