CST Brands Q3 Profit Rises Amid Lower Costs - Update

(RTTNews) - CST Brands Inc. (CST), an independent retailer of motor fuels and convenience merchandise, Monday said third-quarter profit increased from the prior year, helped by lower costs, even as revenues dropped.

The company, which includes Corner Store and Dépanneur du Coin, spun-off from from Valero Energy Corp. (VLO) in early May to enter the market as the second-largest publicly-traded fuel and convenience merchandise retailer in North America.

Kim Bowers, CEO, said, "Our company delivered strong year-over-year earnings growth. We continue to make great strides as a separate, publicly-traded company, working on key initiatives such as establishing our culture, further developing our brand, and reducing and eliminating the transition services being provided by our former parent company.''

Net income increased to $41 million or $0.55 per share from $24 million or $0.31 per share last year. Excluding asset impairments charges of $2 million, net income would have been $43 million or $0.57 per share for the just concluded quarter.

On average, three analysts polled by Thomson Reuters expected the company to report profit per share of $0.56 for the quarter. Analysts' estimates typically exclude special items.

Operating revenues declined to $3.32 billion from last year's $3.38 billion. Analysts expected revenue of $3.32 billion for the quarter.

Motor fuel revenues in the U.S. segment declined $47 million, driven by a 1 percent drop in the per gallon average motor fuel selling price as well as in motor fuel gallons sold.

Motor fuel revenues declined $28 million in the Canada retail segment, primarily from a 2 percent drop in motor fuel gallons sold primarily due to fewer average retail sites that sell motor fuel. A $55 million impact from foreign currency effects of the Canadian dollar relative to the U.S. dollar also contributed to the overall revenue decline in the Canadian segment.

Cost of sales declined to $3.026 billion from $3.137 billion, leading to higher gross profit.

The stock closed on Friday at $33.01, up 2.4 percent from the previous close.