March 9, 2010 / 4:59 PM / 8 years ago

UPDATE 2-Couche-Tard profit sags 23 pct on U.S. gas margins

* Q3 EPS $0.29 vs forecast $0.38

* Revenue up 26.2 pct at $4.94 bln (In U.S. dollars unless noted)

TORONTO, March 9 (Reuters) - Alimentation Couche-Tard (ATDb.TO) said on Tuesday quarterly profit dropped 23 percent as gasoline margins at its U.S. convenience stores slipped, disappointing analysts and sending its stock lower.

Shares of Couche-Tard, North America’s second-biggest convenience store operator, backtracked more than 5 percent on the slide in profit, which came even though total revenue and merchandise sales rose sharply.

Earnings dropped to $54.8 million, or 29 cents a share, in its third quarter ended Jan. 31, down from $71.1 million, or 36 cents, a year earlier. That’s well below analyst estimates of 38 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 26.2 percent to $4.94 billion, reflecting a jump in gasoline prices and a stronger Canadian dollar. Analysts had expected $4.89 billion in revenue.

The company operates 3,600 convenience stores in the United States under the Circle K banner and more than 5,400 under the Mac’s banner in Canada.

Pulling down overall profit, gross margin on gasoline sold in company-operated stores in the United States fell 29.3 percent to 12.88 cents a gallon. Gasoline margins rose 17.8 percent to 5.16 Canadian cents per litre in Canada.

Shares of Couche-Tard were down C$1.11 at $18.93 late Tuesday afternoon on the Toronto Stock Exchange, after falling to their lowest level in more than four months earlier in the session.

$1=$1.03 Canadian Reporting by Scott Anderson; editing by Peter Galloway

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