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Sunoco LP (SUN) Down 2.5% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Sunoco LP (SUN - Free Report) . Shares have lost about 2.5% 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 drivers.
Sunoco Q4 Earnings Miss Estimates
Sunoco LP reported the fourth-quarter 2023 loss of $1.50 per unit, falling short of the Zacks Consensus Estimate for earnings of $1.01. The bottom line turned around from the year-ago quarter’s earnings of 42 cents.
Total quarterly revenues of $5.64 billion beat the Zacks Consensus Estimate of $5.61 billion. However, the top line declined from the $5.92 billion reported a year ago.
Weak quarterly earnings resulted from lower motor fuel sales across all segments.
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 $5.4 billion from $5.7 billion in the comparable period of 2022 primarily due to lower motor fuel sales. The reported figure is slightly above our estimate of $5.3 billion.
All Other: The unit reported total revenues of $213 million compared with $226 million in the prior-year quarter. The year-over-year downside can be attributed to lower motor and non-motor fuel sales. The reported figure also lagged our estimate of $216 million.
In terms of volumes, the partnership sold 2.2 billion gallons of fuel in the reported quarter, up 11% from the 2 billion gallons reported in the year-ago period. The metric also beat our estimate of 1.9 billion gallons.
Motor fuel gross profit per gallon was 12.3 cents compared with the year-ago level of 12.8 cents.
Sunoco reported a total operating loss of $43 million, which significantly declined from the profit of $96 million reported in the prior-year quarter. The figure also missed our estimate of $156.3 million.
For the quarter ended Dec 31, 2023, the net loss was $106 million versus a net income of $55 million in the fourth quarter of 2022. The figure also missed our estimate of a net income of $102.3 million.
Distributable Cash Flow
The adjusted distributable cash flow totaled $148 million in the fourth quarter, down from the year-ago level of $153 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses in the reported quarter declined to $5.7 billion from $5.8 billion a year ago.
The partnership incurred a capital expenditure of $83 million in the fourth quarter, comprising $50 million in growth capital and $33 million in maintenance capital.
Balance Sheet
As of Dec 31, 2023, Sunoco had cash and cash equivalents of $29 million, and a net long-term debt of $3.6 billion.
Guidance
For 2024, the partnership expects adjusted EBITDA between $975 million and $1 billion, indicating an increase from the $964 million reported in 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 10.05% due to these changes.
VGM Scores
Currently, Sunoco LP has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile 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. It comes with little surprise Sunoco LP has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Sunoco LP (SUN) Down 2.5% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Sunoco LP (SUN - Free Report) . Shares have lost about 2.5% 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 drivers.
Sunoco Q4 Earnings Miss Estimates
Sunoco LP reported the fourth-quarter 2023 loss of $1.50 per unit, falling short of the Zacks Consensus Estimate for earnings of $1.01. The bottom line turned around from the year-ago quarter’s earnings of 42 cents.
Total quarterly revenues of $5.64 billion beat the Zacks Consensus Estimate of $5.61 billion. However, the top line declined from the $5.92 billion reported a year ago.
Weak quarterly earnings resulted from lower motor fuel sales across all segments.
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 $5.4 billion from $5.7 billion in the comparable period of 2022 primarily due to lower motor fuel sales. The reported figure is slightly above our estimate of $5.3 billion.
All Other: The unit reported total revenues of $213 million compared with $226 million in the prior-year quarter. The year-over-year downside can be attributed to lower motor and non-motor fuel sales. The reported figure also lagged our estimate of $216 million.
In terms of volumes, the partnership sold 2.2 billion gallons of fuel in the reported quarter, up 11% from the 2 billion gallons reported in the year-ago period. The metric also beat our estimate of 1.9 billion gallons.
Motor fuel gross profit per gallon was 12.3 cents compared with the year-ago level of 12.8 cents.
Sunoco reported a total operating loss of $43 million, which significantly declined from the profit of $96 million reported in the prior-year quarter. The figure also missed our estimate of $156.3 million.
For the quarter ended Dec 31, 2023, the net loss was $106 million versus a net income of $55 million in the fourth quarter of 2022. The figure also missed our estimate of a net income of $102.3 million.
Distributable Cash Flow
The adjusted distributable cash flow totaled $148 million in the fourth quarter, down from the year-ago level of $153 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses in the reported quarter declined to $5.7 billion from $5.8 billion a year ago.
The partnership incurred a capital expenditure of $83 million in the fourth quarter, comprising $50 million in growth capital and $33 million in maintenance capital.
Balance Sheet
As of Dec 31, 2023, Sunoco had cash and cash equivalents of $29 million, and a net long-term debt of $3.6 billion.
Guidance
For 2024, the partnership expects adjusted EBITDA between $975 million and $1 billion, indicating an increase from the $964 million reported in 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 10.05% due to these changes.
VGM Scores
Currently, Sunoco LP has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile 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. It comes with little surprise Sunoco LP has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.