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Why Is Sunoco LP (SUN) Up 3.5% 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 added about 3.5% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Sunoco Q3 Earnings Beat Estimates, Revenues Fall Y/Y
Sunoco LP reported third-quarter 2023 earnings of $2.95 per unit, which beat the Zacks Consensus Estimate of $1.11. The bottom line improved from the year-ago quarter’s 75 cents per unit.
Total quarterly revenues of $6,320 million beat the Zacks Consensus Estimate of $5,755 million. The top line, however, declined from $6,594 million reported a year ago.
Strong quarterly earnings were driven by a rise in the volume of fuel gallons sold, coupled with a decrease in the 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: Total revenues from the segment decreased to $6,080 million from $6,334 million in the comparable period of 2022, primarily due to lower motor fuel sales.
All Other: The unit reported total revenues of $240 million compared with $260 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 $264 million.
In terms of volumes, the partnership sold 2,124 million gallons of fuel in the reported quarter, up from 1,9856 in the year-ago period. Motor fuel gross profit per gallon was 13 cents compared with the year-ago level of 13.9 cents.
The total operating income increased to $338 million from $150 million in the prior-year quarter. The figure also beat our estimate of $146.4 million.
For the quarter ended Sep 30, 2023, net income was $272 million versus $83 million in the third quarter of 2022. The figure also surpassed our estimate of $113.1 million.
Distributable Cash Flow
Adjusted distributable cash flow totaled $181 million in the third quarter, down from the year-ago level of $196 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses in the reported quarter declined to $5,982 million from $6,444 million a year ago.
The partnership incurred a capital expenditure of $45 million in the third quarter, comprising $31 million in growth capital and $14 million in maintenance capital.
Balance Sheet
As of Sep 30, 2023, Sunoco had cash and cash equivalents of $256 million, and a net long-term debt of $3,169 million.
Guidance
The company raised its guidance for 2023 adjusted EBITDA to more than $935 million from the previously predicted band of $865-$915 million.
How Have Estimates Been Moving Since Then?
Estimates review followed a downward path over the past two months.
VGM Scores
Currently, Sunoco LP has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, 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
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) Up 3.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Sunoco LP (SUN - Free Report) . Shares have added about 3.5% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Sunoco Q3 Earnings Beat Estimates, Revenues Fall Y/Y
Sunoco LP reported third-quarter 2023 earnings of $2.95 per unit, which beat the Zacks Consensus Estimate of $1.11. The bottom line improved from the year-ago quarter’s 75 cents per unit.
Total quarterly revenues of $6,320 million beat the Zacks Consensus Estimate of $5,755 million. The top line, however, declined from $6,594 million reported a year ago.
Strong quarterly earnings were driven by a rise in the volume of fuel gallons sold, coupled with a decrease in the 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: Total revenues from the segment decreased to $6,080 million from $6,334 million in the comparable period of 2022, primarily due to lower motor fuel sales.
All Other: The unit reported total revenues of $240 million compared with $260 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 $264 million.
In terms of volumes, the partnership sold 2,124 million gallons of fuel in the reported quarter, up from 1,9856 in the year-ago period. Motor fuel gross profit per gallon was 13 cents compared with the year-ago level of 13.9 cents.
The total operating income increased to $338 million from $150 million in the prior-year quarter. The figure also beat our estimate of $146.4 million.
For the quarter ended Sep 30, 2023, net income was $272 million versus $83 million in the third quarter of 2022. The figure also surpassed our estimate of $113.1 million.
Distributable Cash Flow
Adjusted distributable cash flow totaled $181 million in the third quarter, down from the year-ago level of $196 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses in the reported quarter declined to $5,982 million from $6,444 million a year ago.
The partnership incurred a capital expenditure of $45 million in the third quarter, comprising $31 million in growth capital and $14 million in maintenance capital.
Balance Sheet
As of Sep 30, 2023, Sunoco had cash and cash equivalents of $256 million, and a net long-term debt of $3,169 million.
Guidance
The company raised its guidance for 2023 adjusted EBITDA to more than $935 million from the previously predicted band of $865-$915 million.
How Have Estimates Been Moving Since Then?
Estimates review followed a downward path over the past two months.
VGM Scores
Currently, Sunoco LP has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, 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
Sunoco LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.