Executives with Casey’s General Stores have reported quarterly profits that are better than Wall Street traders had expected. Stock in Casey’s traded about 5% percent higher after the quarterly report was released.

The convenience store chain posted higher profits on its inside-the-store sales of prepared foods and groceries.

The profit margin on fountain drinks and prepared food, like Casey’s Pizza, rose to 63.5%, a couple of percentage points better than the same period a year ago.

Net income fell slightly, two pennies per share, in the quarter, but beat expectations. Revenue for the Ankeny-based chain approached $1.9 billion in the past three months. The value of Casey’s stock has risen more than 20% in the past year.

Casey’s officials also announced today that they have signed an Asset Purchase Agreement for Casey’s to acquire 22 convenience stores from the West Des Moines-based Kum & Go chain. The stores are located in Iowa, Missouri and North Dakota. 

Casey’s said in a news release that the acquisition is subject to “certain regulatory approvals and other customary closing conditions” with the transaction is expected to close in November 2012.

The following Iowa stores are included in the purchase agreement:
210 N Main St, Sigourney; 400 S Main St, Osceola; 744 Washington St, Pella; 413 A Ave W and 901 S Market St, Oskaloosa; 318 N Lincoln St. and 1201 E Main St, Knoxville; 1400 E Washington St, Clarinda; 106 S 4th St, Forest City; 508 SE Kent St, Greenfield; 501 S Main St, Monticello; 903 N Sumner Ave and 301 W Taylor St, Creston; 702 Chatburn Ave, Harlan; 204 S Main St, Albia; 3001 Main St, Emmetsburg; 916 E Main St, Marshalltown; 504 10th St, Hawarden; 1301 W Sheridan Ave, Shenandoah.