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Sunoco LP (SUN) Down 4.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Sunoco LP (SUN - Free Report) . Shares have lost about 4.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sunoco LP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sunoco Beats on Q1 Earnings Estimates
Sunoco reported first-quarter earnings of $2.32 per unit, comfortably beating the Zacks Consensus Estimate of 89 cents. The bottom line significantly increased from the year-ago quarter’s $1.60 per unit.
Total quarterly revenues of $5,402 million surpassed the Zacks Consensus Estimate of $4,849 million. The top line also increased from $3,471 million a year ago.
The strong quarterly earnings were driven by higher motor fuel and non-motor fuel sales.
Segmental Performance
Sunoco reports financial results through two reportable segments — Fuel Distribution and Marketing, and All Other.
Fuel Distribution and Marketing: Total gross profit from the segment increased to $390 million from $317 million in the comparable period of 2021 primarily due to higher motor fuel sales.
All Other: The unit reported a gross profit of $40 million versus $34 million in the comparable period of 2021. The year-over-year increase can be attributed to higher non-motor fuel sales.
In terms of volumes, the partnership sold 1.8 billion gallons of fuel in the reported quarter, marginally up year over year, owing to the energy demand recovery from the coronavirus pandemic. Motor fuel gross profit per gallon was 12.4 cents for the quarter versus the year-ago level of 10.3 cents.
Distribution
For the quarter ended Mar 31, 2022, Sunoco declared a quarterly cash distribution of 82.55 cents per unit or $3.3020 on an annualized basis. Markedly, the distribution was flat on a sequential basis. The trailing 12 months’ cash coverage was 1.66X.
Adjusted distributable cash flow was $142 million in the first quarter, reflecting an increase from the year-ago quarter’s $108 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses for the reported quarter surged to $5,143 million from $3,267 million a year ago.
The partnership incurred a gross capital expenditure of $26 million for the reported quarter, comprising $21 million in growth capital and $5 million in maintenance capital.
Balance Sheet
As of Mar 31, 2022, Sunoco had cash and cash equivalents of $104 million, sequentially up from $25 million. At the first-quarter end, it had net long-term debt of $2,668 million, flat from the fourth-quarter 2021 level. It had a long-term debt to capitalization of 73.9%.
Guidance
For 2022, Sunoco revised its adjusted EBITDA guidance upward to $795-$835 from the previously mentioned $770-$810 million. In 2021, the metric was recorded at $754 million.
The partnership continues to expect maintenance and growth capex of $50 and $150 million, respectively, for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, Sunoco LP has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Sunoco LP has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Sunoco LP (SUN) Down 4.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Sunoco LP (SUN - Free Report) . Shares have lost about 4.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sunoco LP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sunoco Beats on Q1 Earnings Estimates
Sunoco reported first-quarter earnings of $2.32 per unit, comfortably beating the Zacks Consensus Estimate of 89 cents. The bottom line significantly increased from the year-ago quarter’s $1.60 per unit.
Total quarterly revenues of $5,402 million surpassed the Zacks Consensus Estimate of $4,849 million. The top line also increased from $3,471 million a year ago.
The strong quarterly earnings were driven by higher motor fuel and non-motor fuel sales.
Segmental Performance
Sunoco reports financial results through two reportable segments — Fuel Distribution and Marketing, and All Other.
Fuel Distribution and Marketing: Total gross profit from the segment increased to $390 million from $317 million in the comparable period of 2021 primarily due to higher motor fuel sales.
All Other: The unit reported a gross profit of $40 million versus $34 million in the comparable period of 2021. The year-over-year increase can be attributed to higher non-motor fuel sales.
In terms of volumes, the partnership sold 1.8 billion gallons of fuel in the reported quarter, marginally up year over year, owing to the energy demand recovery from the coronavirus pandemic. Motor fuel gross profit per gallon was 12.4 cents for the quarter versus the year-ago level of 10.3 cents.
Distribution
For the quarter ended Mar 31, 2022, Sunoco declared a quarterly cash distribution of 82.55 cents per unit or $3.3020 on an annualized basis. Markedly, the distribution was flat on a sequential basis. The trailing 12 months’ cash coverage was 1.66X.
Adjusted distributable cash flow was $142 million in the first quarter, reflecting an increase from the year-ago quarter’s $108 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses for the reported quarter surged to $5,143 million from $3,267 million a year ago.
The partnership incurred a gross capital expenditure of $26 million for the reported quarter, comprising $21 million in growth capital and $5 million in maintenance capital.
Balance Sheet
As of Mar 31, 2022, Sunoco had cash and cash equivalents of $104 million, sequentially up from $25 million. At the first-quarter end, it had net long-term debt of $2,668 million, flat from the fourth-quarter 2021 level. It had a long-term debt to capitalization of 73.9%.
Guidance
For 2022, Sunoco revised its adjusted EBITDA guidance upward to $795-$835 from the previously mentioned $770-$810 million. In 2021, the metric was recorded at $754 million.
The partnership continues to expect maintenance and growth capex of $50 and $150 million, respectively, for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, Sunoco LP has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Sunoco LP has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.