Alimentation Couche-Tard Inc. reported a profit of $146.4 million US in its latest quarter, up sharply from a year ago, however the results fell well short of analysts' expectations.
Shares in the Quebec-based convenience store and gas station operator were down $3.04 Cdn at $58.35 at the close of trading on the Toronto Stock Exchange.
For the 12 weeks ended April 28, Couche-Tard, which keeps its books in U.S. dollars, said it earned 77 cents per diluted share, up from $117.8 million US, or 65 cents per share, a year ago while revenue increased to $8.77 billion US, up from $6.05 billion US.
However, excluding non-recurring items, Couche-Tard said it earned 61 cents per share in what was the final quarter of its 2013 financial year, up from 57 cents a year ago.
Shares at all-time high this year
According to analysts polled by Thomson Reuters, the company had been expected to earn an adjusted per share profit of 77 cents on revenue of $8.9 billion US of revenues.
For the full, 52-week year, Couche-Tard reported net earnings of $572.8 million US, or $3.07 per diluted share, on revenue of $25.54 billion.
That compared with net earnings of $457.6 million, or $2.49 per share, on revenue of $22.98 billion in fiscal 2012, which was a 53-week year.
Couche-Tard shares have surged in the past year to all-time highs.
Eyeing U.S. expansion
The Quebec-based company is looking to grow its U.S. network. It already owns the Circle K convenience store chain and is seen as a likely bidder to buy the retail assets of oil and gas giant Hess.
Hess announced in May that it will exit its retail, energy marketing and energy trading businesses following pressure from its third-largest shareholder — activist investor Elliott Management — to break up the firm. It owns about 1,350 gasoline stations in 16 East Coast states.
Couche-Tard recently said it has the capacity to spend $1.5 billion on acquisitions but hasn't commented on its interest in Hess, whose locations are mostly in Florida, North Carolina, New York, Massachusetts, Pennsylvania, South Carolina and New Jersey.
Analyst Keith Howlett of Desjardins Capital Markets has said there's a 30 per cent probability of Couche-Tard acquiring Hess's retail assets, saying the company will remain disciplined on how much it would pay in an auction against rivals such as 7-Eleven.
Mac's could profit from looser alcohol sales in Ontario
Meanwhile, Couche-Tard-owned Mac's Convenience Stores could get a boost if Ontario finally allows the sale of alcohol in retail stores. Finance Minister Charles Sousa recently said the governing Liberals wouldn't rule out the sale, while the provincial Tories have advocated such a move.
Mac's Convenience Stores said it would create 1,600 full-time jobs if its Ontario stores were allowed to sell beer, wine and spirits.
Ontario is currently facing an $11.7-billion deficit, which the Liberals have promised to eliminate by 2017-18.
Couche-Tard has about 53,000 employees around the world. It has more than 4,500 company-operated stores in North America and 1,600 locations in Europe.