Parkland Fuel Jumps as Elbow Purchase Adds Profit

Parkland Fuel Corp. (PKI), Canada’s largest independent fuel distributor, surged the most in 18 months after reporting first-quarter earnings that beat analysts’ expectations.

Parkland jumped as much as 8.2 percent to C$17.64, the most intraday since October 2011, and was up 6.3 percent to C$17.33 at 10:59 a.m. in Toronto. Shares in the Red Deer, Alberta-based company declined 14 percent this year through yesterday.

First-quarter net income rose to 42 Canadian cents a share from 26 cents a year earlier while sales jumped 14 percent to C$1.21 billion, aided by Parkland’s purchase of Elbow River Marketing from AvenEx Energy Corp. in December. The acquisition helped boost volumes 29 percent to 314.6 million liters, the company said in a statement. Elbow River runs a fleet of 1,200 leased rail cars throughout Canada and the U.S.

“The magnitude of the beat this quarter, in addition to Elbow’s strong start, provides comfort,” Trevor Johnson, a Toronto-based analyst at National Bank Financial, said in a note to clients upgrading the stock to the equivalent of a buy from hold while maintaining a C$19 price target.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.