TravelCenters of America LLC TA.N, one of the largest truck-stop operators in the United States by number of locations, reported a 46 percent drop in quarterly profit due to lower margins on fuel sales and higher depreciation and amortization costs.
TravelCenters shares fell as much as 30 percent to $8.20 in late-morning trading. The stock was the top percentage loser on the New York Stock Exchange.
The company runs travel centers along interstate highways that sell fuel and offer truck repair and maintenance services. The centers have restaurants and convenience stores.
"We believe the fuel gross margin decline resulted from more difficult industry and fuel market conditions in 2013 versus 2012," Chief Financial Officer Andrew Rebholz said on a post-earnings conference call.
U.S. gasoline prices recorded sharp swings through the three months to June, running up TravelCenters' bill to maintain its fuel inventory. Fuel gross margin per gallon fell by 2 cents to 17 cents in the second quarter.
Chief Executive Thomas O'Brien said fuel conservation by its customers modestly reduced sales volumes. Fuel sales account for more than 80 percent of the company's total revenue.
TravelCenters, which lists Pilot Flying J and Love's Travel Stops & Country Stores as its main competitors, said its rivals' efforts to gain market share also affected fuel margins.
Higher depreciation and amortization costs also ate into the company's net income in the quarter ended June 30. These costs jumped 13 percent to $14.0 million.
TravelCenters' net income dropped to $16.0 million, or 54 cents per share, from $29.9 million, or $1.04 per share, a year earlier. Revenue fell 1 percent to $2.02 billion.
Analysts on average expected earnings of $1 per share on revenue of $2.12 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Sagarika Jaisinghani and Mridhula Raghavan in Bangalore; Editing by Maju Samuel)