July 14, 2009 / 3:58 PM / 8 years ago

UPDATE 2-Couche Tard profit jumps on higher margins

*EPS $0.20 vs C$0.08

*Revenue falls 19.2 pct to $2.99 bln

*Shares up 4.1 percent at C$14.89 (Adds background and analyst’s comments. In U.S. dollars.)

By Scott Anderson

TORONTO, July 14 (Reuters) - Alimentation Couche-Tard (ATDb.TO) reported a stronger quarterly profit on Tuesday, despite a steep drop in revenue, helped partly by higher gasoline margins and a rise in U.S. cigarette sales ahead of an excise tax hike.

Couche-Tard, North America’s second-biggest convenience store retailer and operator of a string of gas bars, said it earned $38 million, or 20 cents a share, in its fourth quarter, up from $15.5 million, or 8 cents a share, a year earlier.

David Hartley, an analyst at BMO Capital Markets, said the results were helped by higher gasoline margins, better same store sales in Canada and the United States and the bump in U.S. cigarette sales.

“All those things contributed to a sound earnings beat in the quarter,” Hartley said.

Couche-Tard’s shares, which have climbed 48 percent in the past year, were up 4.1 percent at C$14.89 early on Tuesday afternoon.

The U.S. government increased its federal excise tax on cigarettes on April 1, which likely resulted in stockpiling ahead of the date. Couche-Tard’s fourth quarter ended on April 26.

Excluding the cigarette sales effect, Hartley estimates the company earned 18 cents a share for the quarter.

The company, which operates under the Circle K banner in the United States and Mac’s in Canada, said revenue fell 19.2 percent to $2.99 billion due to a lower retail prices at the pump and a weaker Canadian dollar.

Analysts had expected, on average, earnings per share of 11 cents before items and revenue of $3.16 billion, according to Reuters Estimates.

Couche-Tard operates more than 5,400 convenience stores, 3,607 of which sell gasoline.

The company said fuel gross margin for the company-operated stores in the United States rose 13.6 percent to 11.38 cents per gallon and climbed 7 percent to 5.62 Canadian cents per litre in Canada.

$1=$1.14 Canadian Reporting by Scott Anderson; editing by Peter Galloway

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