CST Brands 1Q Profit Rises 35.7% And Beats

CST Brands, Inc.

reported 35.7% jump in net income to $19 million in the first quarter from $14 million in the year-ago quarter. Similarly, its earnings increased 33.3% to $0.24 a share from $0.18 a share in the same quarter last year. Excluding items, CST Brands earnings would have earned $0.27 a share. That meant earnings topped by $0.05 a share from the Street analysts estimations of $0.22 a share. The company's total revenues dipped 8.2% to $2.034 billion from $2.215 billion in the previous year quarter thus missing the analysts' predictions of $2.3 billion. Same store sales in the United States were up by 2.2% and 5.6% in Canada. Commenting about the results, CST Brands Chairman and CEO, Kim Lubel, viewed, "We had a strong first quarter led by impressive improvements in retail merchandise sales and gross profits. U.S. merchandise and services gross profits grew by 25% over the first quarter of 2015 on increased sales and margins. Our Canadian stores grew merchandise and services gross profits by 10%, excluding the impact of foreign currency exchange, with an impressive 6% increase in same store sales." He continued to add, "We showed continued strength in fuel gross profits in the U.S., as a result of a favorable fuel margin environment and our continued fuel pricing optimization initiatives. We also executed on our organic and acquisition growth plans with the addition of 173 stores to our network, including the 165-store Flash Foods network." Going forward, the company expects 5,100 – 5,300 gallons per store per day sale in the second quarter. The company hoped to generate better gross margin than the last year's 32.7%. On Thursday, the stock fell 1.2%.