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.
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