UPDATE 1-Couche-Tard profit beats estimates as fuel gross margins rise
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Sept 3 (Reuters) - Canadian convenience store and gasoline station operator Alimentation Couche-Tard Inc reported a better-than- expected quarterly profit as fuel gross margins rose in the United States.
Couche-Tard's shares rose as much as 5 percent to C$34.85 on the Toronto Stock Exchange on Wednesday.
The company's net income rose 5.7 percent to $269.5 million, or 47 cents per share, in the first quarter ended July 20.
Excluding items, the company reported a profit of 48 cents per share, beating the average analyst estimate of 44 cents, according to Thomson Reuters I/B/E/S.
The gross margin for road transportation fuel at company operated stores in the United States rose by about 19 percent to 23 cents per gallon in the quarter.
The company cited improved supply contract terms and favorable market conditions for the rise in fuel margins.
Revenue rose 3 percent to $9.19 billion but fell short of the $9.32 billion analysts on average had estimated.
Revenue was hurt by a 4 percent fall in road transportation fuel revenue in Europe and a 3.2 percent decrease in merchandise and service revenue in Canada.
The company raised its quarterly dividend by 12.5 percent to 4.5 Canadian cents per share.
Couche-Tard said earlier in the day that it agreed to sell its aviation business to Air BP through its unit Stratoil Fuel & Retail AS.
Couche-Tard, which operates in the United States, Europe and Canada, recently said it did not have plans to invest in a $16 billion minority stake in China's Sinopec Sales, the world's largest fuel retail network.
Reuters reported earlier that the company was among suitors short-listed to buy a stake in Sinopec Sales.
Up to Tuesday's close, the Laval, Quebec-based company's stock had risen about 70 percent this year. (Reporting By Tanvi Mehta in Bangalore; Editing by Sriraj Kalluvila)