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EL DORADO, Ark. -- Murphy Oil Corp. received a favorable tax ruling from the Internal Revenue Service and expects to spin off its Murphy Oil USA Inc. retail division once the final details are hammered out with the Securities and Exchange Commission and its board of directors meets, President and CEO Steven A. Cossé said during today's 2013 fiscal second-quarter earnings call.
El Dorado, Ark.-based Murphy Oil Corp.'s board of directors will meet Aug. 7 to officially approve the retail spinoff. Cossé said he would not comment further about the transaction until it is officially approved. However, R. Andrew Clyde has already been tapped to be president of the new retail company, and a board of directors has also been named for the planned spinoff. This led one Wall Street analyst on today’s earnings call to wonder if board approval was simply ceremonial.
"I wouldn't say that with any board decision," Cossé responded. "But we are moving in the direction of a spinoff…Stay tuned, we may have news as soon as next week."
Previously, Cossé said the retail spinoff would take place in the second half of 2013. Once the spinoff is complete, the retail division will operate 1,179 stores. The new company plans to operate more than 1,200 convenience stores by the end of 2013, the chief executive said.
As for earnings, Murphy Oil Corp.'s downstream division, parent to its retail operations, achieved a net profit of $77.9 million for its latest quarter ended June 30. These results represent a $4.6-million profit increase compared to last year. Higher sale prices around ethanol renewable identification numbers were cited as the main reason for the profit increase.
Retail fuel margins per gallon dropped 4 cents to 15.6 cents in the company's latest quarter, while retail merchandise sales per store per month dropped by about $500.
Companywide, Murphy Oil Corp. earned $402.6 million in net income for its latest quarter vs. $295.4 million during 2012's second quarter. Strong net income improvement in the company's exploration and production division accounted for much of the overall earnings rise.