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Why Is Sunoco LP (SUN) Down 1.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Sunoco LP (SUN - Free Report) . Shares have lost about 1.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Sunoco's Q3 Earnings and Revenues Miss Estimates
Sunoco LP 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -23.89% due to these changes.
VGM Scores
Currently, Sunoco LP has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 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.
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Why Is Sunoco LP (SUN) Down 1.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Sunoco LP (SUN - Free Report) . Shares have lost about 1.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Sunoco's Q3 Earnings and Revenues Miss Estimates
Sunoco LP 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -23.89% due to these changes.
VGM Scores
Currently, Sunoco LP has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 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.