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Sunoco's (SUN) Q2 Earnings Miss Estimates, Revenues Fall Y/Y
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Sunoco LP (SUN - Free Report) reported second-quarter 2023 earnings of 78 cents per unit, missing the Zacks Consensus Estimate of $1.02. The bottom line declined from the year-ago quarter’s $1.20 per unit.
Total quarterly revenues of $5,745 million missed the Zacks Consensus Estimate of $5,810 million. The top line also declined from $7,815 million a year ago.
Lower contributions from the Fuel Distribution and Marketing segment primarily led to weak quarterly results.
Sunoco reports financial results through two reportable segments — Fuel Distribution and Marketing and All Other.
Fuel Distribution and Marketing: Total revenues from the segment decreased significantly to $5,521 million from $7,554 million in the comparable period of 2022, primarily due to lower motor fuel sales.
All Other: The unit reported total revenues of $224 million compared with $261 million in the prior-year quarter. The year-over-year downside can be attributed to lower motor fuel sales. The reported figure came in lower than our estimate of $250.8 million.
In terms of volumes, the partnership sold 2,086 million gallons of fuel in the reported quarter, up year over year from 1,985 million gallons. Motor fuel gross profit per gallon was 12.7 cents compared with the year-ago level of 12.3 cents.
However, the total operating income declined to 141 million in the reported quarter from 173 million in the prior-year quarter, even lower than our estimate of 167 million.
For the quarter ended Jun 30, 2023, net income was $87 million versus $121 million in the second quarter of 2022, also lower than our estimate of $107 million.
Distributable Cash Flow
Adjusted distributable cash flow was $175 million in the second quarter, up from the year-ago quarter’s $159 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses in the reported quarter declined to $5,604 million from $7,642 million a year ago.
The partnership incurred a capital expenditure of $50 million in the reported quarter, comprising $35 million in growth capital and $15 million in maintenance capital.
Balance Sheet
As of Jun 30, 2023, Sunoco had cash and cash equivalents of $239 million. At the second quarter end, it had a net long-term debt of $2,673 million.
Guidance
For 2023, the company kept its guidance unchanged for adjusted EBITDA within $865-$915 million, as previously reported.
Zacks Rank & Stocks to Consider
Sunoco currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy space are Evolution Petroleum Corporation (EPM - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Crestwood Equity Partners LP . While both EPM and MUSA sport a Zacks Rank #1 (Strong Buy), CEQP carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is touted as a key independent energy player through its ownership interests in onshore oil and natural gas properties in the United States.
Murphy USA serves 1.6 million customers daily and owns a dedicated line on the Colonial Pipeline. MUSA operates stations near Walmart supercenters and is a low-cost, high-volume fuel seller. This enables the company to attract significantly more transactions than its peers.
Headquartered in Houston, TX, Crestwood is a master limited partnership that provides a wide range of fee-based infrastructure solutions in major U.S. shale plays like the Bakken Shale, Delaware Basin, Powder River Basin, Marcellus Shale and others. The company is least exposed to commodity price fluctuations since it generates stable fee-based revenues from diverse midstream energy assets via long-term contracts.
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Sunoco's (SUN) Q2 Earnings Miss Estimates, Revenues Fall Y/Y
Sunoco LP (SUN - Free Report) reported second-quarter 2023 earnings of 78 cents per unit, missing the Zacks Consensus Estimate of $1.02. The bottom line declined from the year-ago quarter’s $1.20 per unit.
Total quarterly revenues of $5,745 million missed the Zacks Consensus Estimate of $5,810 million. The top line also declined from $7,815 million a year ago.
Lower contributions from the Fuel Distribution and Marketing segment primarily led to weak quarterly results.
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: Total revenues from the segment decreased significantly to $5,521 million from $7,554 million in the comparable period of 2022, primarily due to lower motor fuel sales.
All Other: The unit reported total revenues of $224 million compared with $261 million in the prior-year quarter. The year-over-year downside can be attributed to lower motor fuel sales. The reported figure came in lower than our estimate of $250.8 million.
In terms of volumes, the partnership sold 2,086 million gallons of fuel in the reported quarter, up year over year from 1,985 million gallons. Motor fuel gross profit per gallon was 12.7 cents compared with the year-ago level of 12.3 cents.
However, the total operating income declined to 141 million in the reported quarter from 173 million in the prior-year quarter, even lower than our estimate of 167 million.
For the quarter ended Jun 30, 2023, net income was $87 million versus $121 million in the second quarter of 2022, also lower than our estimate of $107 million.
Distributable Cash Flow
Adjusted distributable cash flow was $175 million in the second quarter, up from the year-ago quarter’s $159 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses in the reported quarter declined to $5,604 million from $7,642 million a year ago.
The partnership incurred a capital expenditure of $50 million in the reported quarter, comprising $35 million in growth capital and $15 million in maintenance capital.
Balance Sheet
As of Jun 30, 2023, Sunoco had cash and cash equivalents of $239 million. At the second quarter end, it had a net long-term debt of $2,673 million.
Guidance
For 2023, the company kept its guidance unchanged for adjusted EBITDA within $865-$915 million, as previously reported.
Zacks Rank & Stocks to Consider
Sunoco currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy space are Evolution Petroleum Corporation (EPM - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Crestwood Equity Partners LP . While both EPM and MUSA sport a Zacks Rank #1 (Strong Buy), CEQP carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is touted as a key independent energy player through its ownership interests in onshore oil and natural gas properties in the United States.
Murphy USA serves 1.6 million customers daily and owns a dedicated line on the Colonial Pipeline. MUSA operates stations near Walmart supercenters and is a low-cost, high-volume fuel seller. This enables the company to attract significantly more transactions than its peers.
Headquartered in Houston, TX, Crestwood is a master limited partnership that provides a wide range of fee-based infrastructure solutions in major U.S. shale plays like the Bakken Shale, Delaware Basin, Powder River Basin, Marcellus Shale and others. The company is least exposed to commodity price fluctuations since it generates stable fee-based revenues from diverse midstream energy assets via long-term contracts.