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Sunoco (SUN) Readies for Q2 Earnings: What's in the Cards?

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Sunoco LP (SUN - Free Report) is scheduled to release second-quarter 2019 results on Aug 7, after the closing bell.

The leading wholesale distributors of motor fuels beat the Zacks Consensus Estimate for earnings in three of the prior four quarters, the average positive earnings surprise being 29.7%. Let’s see how things are shaping up prior to the announcement.

Which Way Are Estimates Treading?

Let’s look at the estimate revision trend to get a clear picture of what analysts expect from the partnership’s upcoming results.

The Zacks Consensus Estimate for second-quarter earnings, which has been revised upward in the past 30 days, is pegged at 74 cents. Despite the revision, the bottom line is likely to see a year-over-year decline of 17.8%.

Moreover, the Zacks Consensus Estimate for revenues is pegged at $4.3 billion, calling for a fall of 6.2% from the year-ago quarter’s tally.

Sunoco LP Price and EPS Surprise

 

Sunoco LP Price and EPS Surprise

Sunoco LP price-eps-surprise | Sunoco LP Quote

Why a Likely Positive Surprise?

Our proven model shows that Sunoco is likely to beat on earnings in the to-be-reported quarter because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The partnership has an Earnings ESP of +14.64% since the Most Accurate Estimate of 85 cents is higher than the Zacks Consensus Estimate of 74 cents.

Zacks Rank: Sunoco currently carries a Zacks Rank #2. The combination of a Zacks Rank #2 and +14.64% ESP makes us quite confident of an earnings beat in the quarter to be reported.

Meanwhile, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Factors at Play

From the distribution of several fuel brands and dominant positions in 30 states, the partnership generates stable fee-based cash flows. Moreover, demand for fuel in the domestic economy, which was solid owing to higher consumer spending, should support the partnership’s quarterly numbers.

Apart from fuel distribution businesses, the extensive networks of transportation assets and terminals for refined products add to Sunoco’s steady cash flow.

Other Stocks to Consider

Here are a few other firms that you may want to consider on the basis of our model. These also have the right combination of elements to beat earnings this quarter.

Cheniere Energy, Inc. (LNG - Free Report) is set to report second-quarter 2019 earnings on Aug 8. The stock has an Earnings ESP of +88.46% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NuStar Energy L.P. is gearing up to report second-quarter 2019 earnings on Aug 8. The stock has an Earnings ESP of +14.58% and a Zacks Rank #3.

Global Partners LP (GLP - Free Report) has an Earnings ESP of +44.74% and is a #3 Ranked player. The partnership is slated to release second-quarter 2019 earnings on Aug 8.

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