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Sunoco LP (SUN) Up 3.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Sunoco LP (SUN - Free Report) . Shares have added about 3.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sunoco LP due for a pullback? 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 Q3 Earnings & Revenues Miss Estimates
Sunoco LP reported a third-quarter 2024 loss of 26 cents per unit, which missed the Zacks Consensus Estimate for earnings of $1.53 per unit. The reported figure also declined from the year-ago quarter’s earnings of $2.95 per unit.
Total quarterly revenues of $5.75 billion missed the Zacks Consensus Estimate of $5.97 billion. The top line also decreased from $6.32 billion reported in the year-ago quarter.
Weak quarterly results can be attributed to increased operating costs and higher general and administrative expenses.
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 $253 million from $234 million in the comparable period of 2023. The segment benefited from higher motor fuel sales and improved fuel margin per gallon compared to the previous year.
Pipeline Systems: The unit reported adjusted EBITDA of $136 million compared with $2 million in the prior-year quarter. This figure included one-time transaction-related expenses worth $11 million. The increase was primarily driven by the acquisition of NuStar.
Terminals: The segment reported adjusted EBITDA of $67 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 across the East Coast and Midwest.
In terms of volume, the partnership sold 2.1 billion gallons of fuel in the reported quarter, up 1% from the prior-year quarter’s level. The figure also beat our estimate of 2 billion gallons.
Motor fuel gross profit per gallon was 12.8 cents compared with the year-ago level of 12.5 cents.
Sunoco reported a total operating income of $107 million, which decreased from $338 million in the prior-year quarter.
For the quarter ended Sept. 30, 2024, the net income was $2 million compared with $272 million in the third quarter of 2023.
Distributable Cash Flow
The adjusted distributable cash flow totaled $349 million, up from the year-ago level of $181 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses amounted to $5.64 billion, down from $5.98 billion a year ago.
The partnership incurred a capital expenditure of $93 million, comprising $67 million in growth capital and $26 million in maintenance capital.
Balance Sheet
As of Sept. 30, 2024, Sunoco had cash and cash equivalents of $116 million and a net long-term debt of $7.26 billion.
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 poor Growth Score of F, a grade with the same score on the momentum front. However, 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 D. 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. 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 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Targa Resources reported revenues of $3.85 billion in the last reported quarter, representing a year-over-year change of -1.2%. EPS of $1.75 for the same period compares with $0.97 a year ago.
Targa Resources is expected to post earnings of $1.89 per share for the current quarter, representing a year-over-year change of +53.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.
Targa Resources has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Sunoco LP (SUN) Up 3.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Sunoco LP (SUN - Free Report) . Shares have added about 3.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sunoco LP due for a pullback? 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 Q3 Earnings & Revenues Miss Estimates
Sunoco LP reported a third-quarter 2024 loss of 26 cents per unit, which missed the Zacks Consensus Estimate for earnings of $1.53 per unit. The reported figure also declined from the year-ago quarter’s earnings of $2.95 per unit.
Total quarterly revenues of $5.75 billion missed the Zacks Consensus Estimate of $5.97 billion. The top line also decreased from $6.32 billion reported in the year-ago quarter.
Weak quarterly results can be attributed to increased operating costs and higher general and administrative expenses.
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 $253 million from $234 million in the comparable period of 2023. The segment benefited from higher motor fuel sales and improved fuel margin per gallon compared to the previous year.
Pipeline Systems: The unit reported adjusted EBITDA of $136 million compared with $2 million in the prior-year quarter. This figure included one-time transaction-related expenses worth $11 million. The increase was primarily driven by the acquisition of NuStar.
Terminals: The segment reported adjusted EBITDA of $67 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 across the East Coast and Midwest.
In terms of volume, the partnership sold 2.1 billion gallons of fuel in the reported quarter, up 1% from the prior-year quarter’s level. The figure also beat our estimate of 2 billion gallons.
Motor fuel gross profit per gallon was 12.8 cents compared with the year-ago level of 12.5 cents.
Sunoco reported a total operating income of $107 million, which decreased from $338 million in the prior-year quarter.
For the quarter ended Sept. 30, 2024, the net income was $2 million compared with $272 million in the third quarter of 2023.
Distributable Cash Flow
The adjusted distributable cash flow totaled $349 million, up from the year-ago level of $181 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses amounted to $5.64 billion, down from $5.98 billion a year ago.
The partnership incurred a capital expenditure of $93 million, comprising $67 million in growth capital and $26 million in maintenance capital.
Balance Sheet
As of Sept. 30, 2024, Sunoco had cash and cash equivalents of $116 million and a net long-term debt of $7.26 billion.
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 poor Growth Score of F, a grade with the same score on the momentum front. However, 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 D. 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. 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 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Targa Resources reported revenues of $3.85 billion in the last reported quarter, representing a year-over-year change of -1.2%. EPS of $1.75 for the same period compares with $0.97 a year ago.
Targa Resources is expected to post earnings of $1.89 per share for the current quarter, representing a year-over-year change of +53.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.
Targa Resources has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.