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Sunoco (SUN) Down 2% Despite Q2 Earnings & Revenues Beat
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Despite reporting strong quarterly results, Sunoco LP (SUN - Free Report) units are down 2% since Aug 3. A sudden jump in cost of sales concerns the analysts.
It reported second-quarter 2021 earnings of $1.73 per unit, significantly beating the Zacks Consensus Estimate of $1.03. The bottom line jumped from adjusted earnings of $1.64 per unit in the year-ago quarter.
Quarterly revenues of the partnership totaled $4,392 million, beating the Zacks Consensus Estimate of $3,545 million. The figure also increased from $2,080 million a year ago.
The strong quarterly results were owing to increased fuel volumes and non-motor fuel gross profits.
The partnership reports financial statements through two reportable segments — Fuel Distribution and Marketing, and All Other.
Fuel Distribution and Marketing: Total gross profit from the segment decreased to $311 million from $317 million in the comparable period of 2020, primarily due to lower motor fuel sales.
All Other: This unit reported gross profit of $42 million compared with $41 million in the comparable period of 2020. The marginal year-over-year increase can be attributed to higher non-motor fuel sales.
In terms of volumes, the partnership sold 1.9 billion gallons of fuel in the reported quarter, up 28% year over year owing to the energy demand recovery from the coronavirus pandemic. Motor fuel gross profit per gallon was recorded at 11.3 cents for the quarter versus the year-ago level of 13.5 cents.
Distribution
For the quarter ended Jun 30, 2021, Sunoco declared a quarterly cash distribution of 82.55 cents per unit or $3.3020 on an annualized basis. Markedly, this distribution was flat on a sequential basis. Trailing 12-month cash coverage was 1.41X.
Adjusted distributable cash flow was $145 million for the second quarter, reflecting an increase from the year-ago quarter’s $122 million.
Expenses & Capital Expenditure
Total cost of sales and operating expenses for the reported quarter surged to $4,176 million from $1,872 million a year ago.
The partnership incurred gross capital expenditure of $30 million for the quarter under review, comprising $23 million in growth capital and $7 million of maintenance capital.
Balance Sheet
As of Jun 30, 2021, Sunoco had cash and cash equivalents of $87 million, sequentially down from $95 million. At second-quarter end, it had net long-term debt of $2,673 million, down from $2,680 million at first-quarter end. It had a long-term debt to capitalization of 79.6%.
Guidance
Sunoco reiterated full-year 2021 adjusted EBITDA guidance within $725-$765 million. In 2020, the metric was recorded at $739 million. It expects operating expenses within $440-$450 million for 2021.
The firm expects fuel volumes for the year within 7.25-7.75 billion gallons, indicating a rise from the 2020 level of 7.09 billion gallons. Fuel margins will likely be in the range of 11-12 cents per gallon. The same in 2020 was 11.9 cents per gallon.
The Zacks Consensus Estimate for Range Resources’ earnings for 2021 is pegged at $1.53 per share, indicating a massive improvement from the year-ago loss of 9 cents.
Hess’ profits for 2021 are expected to jump 177.1% year over year.
Summit Midstream’s bottom line has witnessed two upward estimate revisions and no downward movement in the past 30 days.
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Sunoco (SUN) Down 2% Despite Q2 Earnings & Revenues Beat
Despite reporting strong quarterly results, Sunoco LP (SUN - Free Report) units are down 2% since Aug 3. A sudden jump in cost of sales concerns the analysts.
It reported second-quarter 2021 earnings of $1.73 per unit, significantly beating the Zacks Consensus Estimate of $1.03. The bottom line jumped from adjusted earnings of $1.64 per unit in the year-ago quarter.
Quarterly revenues of the partnership totaled $4,392 million, beating the Zacks Consensus Estimate of $3,545 million. The figure also increased from $2,080 million a year ago.
The strong quarterly results were owing to increased fuel volumes and non-motor fuel gross profits.
Sunoco LP Price, Consensus and EPS Surprise
Sunoco LP price-consensus-eps-surprise-chart | Sunoco LP Quote
Segmental Performance
The partnership reports financial statements through two reportable segments — Fuel Distribution and Marketing, and All Other.
Fuel Distribution and Marketing: Total gross profit from the segment decreased to $311 million from $317 million in the comparable period of 2020, primarily due to lower motor fuel sales.
All Other: This unit reported gross profit of $42 million compared with $41 million in the comparable period of 2020. The marginal year-over-year increase can be attributed to higher non-motor fuel sales.
In terms of volumes, the partnership sold 1.9 billion gallons of fuel in the reported quarter, up 28% year over year owing to the energy demand recovery from the coronavirus pandemic. Motor fuel gross profit per gallon was recorded at 11.3 cents for the quarter versus the year-ago level of 13.5 cents.
Distribution
For the quarter ended Jun 30, 2021, Sunoco declared a quarterly cash distribution of 82.55 cents per unit or $3.3020 on an annualized basis. Markedly, this distribution was flat on a sequential basis. Trailing 12-month cash coverage was 1.41X.
Adjusted distributable cash flow was $145 million for the second quarter, reflecting an increase from the year-ago quarter’s $122 million.
Expenses & Capital Expenditure
Total cost of sales and operating expenses for the reported quarter surged to $4,176 million from $1,872 million a year ago.
The partnership incurred gross capital expenditure of $30 million for the quarter under review, comprising $23 million in growth capital and $7 million of maintenance capital.
Balance Sheet
As of Jun 30, 2021, Sunoco had cash and cash equivalents of $87 million, sequentially down from $95 million. At second-quarter end, it had net long-term debt of $2,673 million, down from $2,680 million at first-quarter end. It had a long-term debt to capitalization of 79.6%.
Guidance
Sunoco reiterated full-year 2021 adjusted EBITDA guidance within $725-$765 million. In 2020, the metric was recorded at $739 million. It expects operating expenses within $440-$450 million for 2021.
The firm expects fuel volumes for the year within 7.25-7.75 billion gallons, indicating a rise from the 2020 level of 7.09 billion gallons. Fuel margins will likely be in the range of 11-12 cents per gallon. The same in 2020 was 11.9 cents per gallon.
Zacks Rank & Other Stocks to Consider
The company currently has a Zacks Rank #2 (Buy). Other top-ranked stocks from the energy space include Range Resources Corporation (RRC - Free Report) , Hess Corporation (HES - Free Report) and Summit Midstream Partners, LP , each having a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Range Resources’ earnings for 2021 is pegged at $1.53 per share, indicating a massive improvement from the year-ago loss of 9 cents.
Hess’ profits for 2021 are expected to jump 177.1% year over year.
Summit Midstream’s bottom line has witnessed two upward estimate revisions and no downward movement in the past 30 days.