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Why Is Sunoco LP (SUN) Down 0.8% Since Last Earnings Report?
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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 0.8% 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 its most recent earnings report in order to get a better handle on the important drivers.
Sunoco Q2 Earnings Beat Estimates
Sunoco LP reported second-quarter 2024 earnings per share (EPS) of $3.85, which beat the Zacks Consensus Estimate of $1.79. The bottom line also increased from the year-ago quarter’s level of $0.78.
Total quarterly revenues of $6.17 billion beat the Zacks Consensus Estimate of $5.49 billion. The top line increased from $5.75 billion reported a year ago.
The strong quarterly results were largely driven by higher contributions across all segments and a boost in fuel sales, which were further enhanced by the positive impact of the NuStar acquisition.
Segmental Performance
Sunoco reports financial results from the second quarter under three reportable segments — Fuel Distribution, Pipeline Systems and Terminals.
Fuel Distribution: Adjusted EBITDA in the segment increased to $245 million from $226 million in the comparable period of 2023, primarily due to higher motor fuel sales.
Pipeline Systems: The unit reported adjusted EBITDA of $53 million compared with $3 million in the prior-year quarter. The increase was primarily due to the acquisition of NuStar.
Terminals: The segment reported adjusted EBITDA of $22 million, up from $21 million reported in the corresponding period of 2023. The rise was primarily due to the recent acquisitions of NuStar, Zenith European and Zenith Energy terminals located across the East Coast and Midwest.
In terms of volume, the partnership sold 2.2 billion gallons of fuel in the reported quarter, up 5% from the prior-year quarter’s level. The figure also beat our estimate of 2.1 billion gallons.
Motor fuel gross profit per gallon was 11.8 cents compared with the year-ago level of 11.9 cents.
Sunoco reported a total operating income of $150 million, which increased from $141 million reported in the prior-year quarter.
For the quarter ended Jun 30, 2024, the net income was $501 million compared with $87 million in the second quarter of 2023.
Distributable Cash Flow
The adjusted distributable cash flow totaled $295 million, up from the year-ago level of $175 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses increased to $6.02 billion from $5.60 billion a year ago.
The partnership incurred a capital expenditure of $78 million, comprising $52 million in growth capital and $26 million in maintenance capital.
Balance Sheet
As of Jun 30, 2024, Sunoco had cash and cash equivalents of $226 million and a net long-term debt of $7.3 billion.
Guidance
For 2024, the partnership reaffirms its adjusted EBITDA projection in the range of $1.46-$1.52 billion, implying an increase from $964 million reported in 2023. Additionally, the partnership expects approximately $50 million in synergies related to the acquisition of NuStar.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -10.86% due to these changes.
VGM Scores
At this time, Sunoco LP has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Sunoco LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Sunoco LP belongs to the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry. Another stock from the same industry, Targa Resources, Inc. (TRGP - Free Report) , has gained 9.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Targa Resources reported revenues of $3.56 billion in the last reported quarter, representing a year-over-year change of +4.7%. EPS of $1.33 for the same period compares with $1.44 a year ago.
Targa Resources is expected to post earnings of $1.55 per share for the current quarter, representing a year-over-year change of +59.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +6.7%.
Targa Resources has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is Sunoco LP (SUN) Down 0.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Sunoco LP (SUN - Free Report) . Shares have lost about 0.8% 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 its most recent earnings report in order to get a better handle on the important drivers.
Sunoco Q2 Earnings Beat Estimates
Sunoco LP reported second-quarter 2024 earnings per share (EPS) of $3.85, which beat the Zacks Consensus Estimate of $1.79. The bottom line also increased from the year-ago quarter’s level of $0.78.
Total quarterly revenues of $6.17 billion beat the Zacks Consensus Estimate of $5.49 billion. The top line increased from $5.75 billion reported a year ago.
The strong quarterly results were largely driven by higher contributions across all segments and a boost in fuel sales, which were further enhanced by the positive impact of the NuStar acquisition.
Segmental Performance
Sunoco reports financial results from the second quarter under three reportable segments — Fuel Distribution, Pipeline Systems and Terminals.
Fuel Distribution: Adjusted EBITDA in the segment increased to $245 million from $226 million in the comparable period of 2023, primarily due to higher motor fuel sales.
Pipeline Systems: The unit reported adjusted EBITDA of $53 million compared with $3 million in the prior-year quarter. The increase was primarily due to the acquisition of NuStar.
Terminals: The segment reported adjusted EBITDA of $22 million, up from $21 million reported in the corresponding period of 2023. The rise was primarily due to the recent acquisitions of NuStar, Zenith European and Zenith Energy terminals located across the East Coast and Midwest.
In terms of volume, the partnership sold 2.2 billion gallons of fuel in the reported quarter, up 5% from the prior-year quarter’s level. The figure also beat our estimate of 2.1 billion gallons.
Motor fuel gross profit per gallon was 11.8 cents compared with the year-ago level of 11.9 cents.
Sunoco reported a total operating income of $150 million, which increased from $141 million reported in the prior-year quarter.
For the quarter ended Jun 30, 2024, the net income was $501 million compared with $87 million in the second quarter of 2023.
Distributable Cash Flow
The adjusted distributable cash flow totaled $295 million, up from the year-ago level of $175 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses increased to $6.02 billion from $5.60 billion a year ago.
The partnership incurred a capital expenditure of $78 million, comprising $52 million in growth capital and $26 million in maintenance capital.
Balance Sheet
As of Jun 30, 2024, Sunoco had cash and cash equivalents of $226 million and a net long-term debt of $7.3 billion.
Guidance
For 2024, the partnership reaffirms its adjusted EBITDA projection in the range of $1.46-$1.52 billion, implying an increase from $964 million reported in 2023. Additionally, the partnership expects approximately $50 million in synergies related to the acquisition of NuStar.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -10.86% due to these changes.
VGM Scores
At this time, Sunoco LP has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Sunoco LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Sunoco LP belongs to the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry. Another stock from the same industry, Targa Resources, Inc. (TRGP - Free Report) , has gained 9.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Targa Resources reported revenues of $3.56 billion in the last reported quarter, representing a year-over-year change of +4.7%. EPS of $1.33 for the same period compares with $1.44 a year ago.
Targa Resources is expected to post earnings of $1.55 per share for the current quarter, representing a year-over-year change of +59.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +6.7%.
Targa Resources has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.