CST Brands Q1 Profit Down - Quick Facts

(RTTNews) - CST Brands Inc. (CST), a retailer of transportation fuels and convenience goods, reported that its net income for the first-quarter 2014 fell to $11 million from $23 million in the year ago quarter. Earnings per share for the quarter dropped to $0.14 from $0.30 in the previous year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.19 per share for the quarter. Analysts' estimates typically exclude special items.

The company stated that it experienced increases in its motor fuel and merchandise gross margins in the U.S. and declines in these same margins in Canada. The rapidly rising wholesale motor fuel prices during the first quarter of 2013 negatively impacted its U.S. motor fuel gross margin for that period and wholesale motor fuel prices were more stable during the first quarter of 2014.

The decline in its motor fuel and merchandise gross margins in Canada were primarily the result of a decline in value of the Canadian dollar relative to the U.S. dollar.

Also impacting its 2014 net income were increases in general and administrative expenses and interest expense of $10 million and $10 million, respectively. The increase in general and administrative expenses was the result of new costs associated with being an independent, stand-alone, public company, including additional corporate personnel and associated benefits and stock-based compensation. The increase in interest expense was the result of the debt issued in connection with the spin-off.

Quarterly operating revenues were $3.00 billion down from $3.19 billion in the prior year. Wall Street expected revenues of $3.07 billion for the quarter.