TravelCenters of America Profit Nearly Triples
TravelCenters of America, the only publicly traded truck stop operator, capitalized on a 65% improvement in fuel-sale profit margins to nearly triple net income to $34.3 million, or $0.91 per share.
TA, based in Westlake, Ohio, said margins per gallon rose to 27.8 cents in the fourth quarter from 16.9 cents a year earlier as fuel sale prices were dropped more slowly than product prices declined. In the year-earlier period, net income was $12 million, or 39 cents.
The company raised margins despite a 15% decline in fuel revenue to $1.33 billion that resulted from lower diesel and gasoline prices during the quarter. Fuel sales account for nearly 80% of total revenue that reached $1.73 billion.
“The significant move in fuel product pricing during the second half of 2014 contributed to much of the year-over-year improvement with respect to TA's fuel gross margins,” CEO Thomas O’Brien said in a statement.
O’Brien also said “it is uncertain whether fuel gross margins will remain as elevated as in the 2014 fourth quarter [they have abated somewhat thus far in the first quarter of 2015].”
Profit margins on nonfuel business narrowed due to a change in the mix of products sold, but overall revenue rose $46.8 million, or 13%, to $397 million.
TA in the 2013 period achieved a profit because of a $28.2 million tax benefit related to deferred asset valuation.
