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Sunoco's (SUN) Q3 Earnings and Revenues Miss Estimates
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Sunoco LP (SUN - Free Report) reported third-quarter earnings of 75 cents per unit, missing the Zacks Consensus Estimate of $1.14. The bottom line significantly decreased from the year-ago quarter’s $1.00 per unit.
Total quarterly revenues of $6,594 million missed the Zacks Consensus Estimate of $7,575 million. The top line, however, increased from $4,779 million a year ago.
The weak quarterly earnings were owing to higher total cost of sales and operating expenses.
Sunoco reports financial results through two reportable segments — Fuel Distribution and Marketing, and All Other.
Fuel Distribution and Marketing: Adjusted EBITDA from the segment increased to $250 million from $186 million in the comparable period of 2021, primarily due to higher motor fuel sales.
All Other: The unit reported an adjusted EBITDA of $26 million compared with $12 million in the prior-year quarter. The year-over-year increase can be attributed to higher non-motor and motor fuel sales.
In terms of volumes, the partnership sold 1,986 million gallons of fuel in the reported quarter, up year over year. Motor fuel gross profit per gallon was 13.9 cents compared with the year-ago level of 11.3 cents.
Distributable Cash Flow
Adjusted distributable cash flow was $196 million in the third quarter, reflecting an increase from the year-ago quarter’s $146 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses in the reported quarter surged to $6,444 million from $4,626 million a year ago.
The partnership incurred a capital expenditure of $42 million in the reported quarter, comprising $31 million in growth capital and $11 million in maintenance capital.
Balance Sheet
As of Sep 30, 2022, Sunoco had cash and cash equivalents of $196 million. At the third-quarter end, it had net long-term debt of $2,670 million.
Guidance
For 2022, Sunoco expects its adjusted EBITDA in the band of $845 million to $865 million.
Being a midstream energy player, Magellan Midstream’s business model is less exposed to volatility in oil and gas prices. In fact, contributions from core fee-based transportation and terminals activities have aided MMP’s results in the third quarter of this year.
In the core of gas-rich Marcellus and Utica Shales, EQT Corporation has a strong foothold. Being a leading producer of natural gas, EQT is benefiting from high natural gas prices. For 2022, it is likely to witness earnings growth of 369.6%.
The sizable refining and marketing operations of BP provides significant protection to the company from low commodity prices. The company is also focused on the reduction of net debt load. For 2022, BP is likely to witness earnings growth of 134.8%.
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Sunoco's (SUN) Q3 Earnings and Revenues Miss Estimates
Sunoco LP (SUN - Free Report) reported third-quarter earnings of 75 cents per unit, missing the Zacks Consensus Estimate of $1.14. The bottom line significantly decreased from the year-ago quarter’s $1.00 per unit.
Total quarterly revenues of $6,594 million missed the Zacks Consensus Estimate of $7,575 million. The top line, however, increased from $4,779 million a year ago.
The weak quarterly earnings were owing to higher total cost of sales and operating expenses.
Sunoco LP Price, Consensus and EPS Surprise
Sunoco LP price-consensus-eps-surprise-chart | Sunoco LP Quote
Segmental Performance
Sunoco reports financial results through two reportable segments — Fuel Distribution and Marketing, and All Other.
Fuel Distribution and Marketing: Adjusted EBITDA from the segment increased to $250 million from $186 million in the comparable period of 2021, primarily due to higher motor fuel sales.
All Other: The unit reported an adjusted EBITDA of $26 million compared with $12 million in the prior-year quarter. The year-over-year increase can be attributed to higher non-motor and motor fuel sales.
In terms of volumes, the partnership sold 1,986 million gallons of fuel in the reported quarter, up year over year. Motor fuel gross profit per gallon was 13.9 cents compared with the year-ago level of 11.3 cents.
Distributable Cash Flow
Adjusted distributable cash flow was $196 million in the third quarter, reflecting an increase from the year-ago quarter’s $146 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses in the reported quarter surged to $6,444 million from $4,626 million a year ago.
The partnership incurred a capital expenditure of $42 million in the reported quarter, comprising $31 million in growth capital and $11 million in maintenance capital.
Balance Sheet
As of Sep 30, 2022, Sunoco had cash and cash equivalents of $196 million. At the third-quarter end, it had net long-term debt of $2,670 million.
Guidance
For 2022, Sunoco expects its adjusted EBITDA in the band of $845 million to $865 million.
Zacks Rank & Stocks to Consider
Sunoco currently carries a Zacks Rank #3 (Hold). Better-ranked players in the same space include Magellan Midstream Partners , EQT Corporation (EQT - Free Report) and BP plc (BP - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Being a midstream energy player, Magellan Midstream’s business model is less exposed to volatility in oil and gas prices. In fact, contributions from core fee-based transportation and terminals activities have aided MMP’s results in the third quarter of this year.
In the core of gas-rich Marcellus and Utica Shales, EQT Corporation has a strong foothold. Being a leading producer of natural gas, EQT is benefiting from high natural gas prices. For 2022, it is likely to witness earnings growth of 369.6%.
The sizable refining and marketing operations of BP provides significant protection to the company from low commodity prices. The company is also focused on the reduction of net debt load. For 2022, BP is likely to witness earnings growth of 134.8%.