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SUN Misses on Q4 Earnings & Revenues, Hikes Distribution
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Sunoco LP (SUN - Free Report) reported fourth-quarter 2024 earnings of 75 cents per unit, which missed the Zacks Consensus Estimate of $2.38. However, the bottom line improved from the year-ago quarter’s reported loss of $1.50 per unit.
Total quarterly revenues of $5.27 billion missed the Zacks Consensus Estimate of $5.74 billion. The top line also decreased from $5.64 billion reported in the year-ago quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The year-over-year increase in earnings can be attributed to lower total expenses and higher net income, partially offset by lower fuel margins.
For the fourth quarter of 2024, the board of directors of Sunoco's general partner declared a distribution of $0.8865 per unit, or $3.5460 on an annualized basis. This marks a sequential increase from $0.8756 per unit, or $3.5024 annualized.
The distribution will be paid on Feb. 19, 2025, to common unitholders of record as of Feb. 7, 2025. The partnership is targeting a distribution growth rate of at least 5% for 2025 and plans to announce future increases on a quarterly basis.
Segmental Performance
Sunoco posts financial results under three reportable segments — Fuel Distribution, Pipeline Systems and Terminals.
Fuel Distribution: Adjusted EBITDA in the segment decreased to $192 million from $209 million in the comparable period of 2023. The segment was affected by lower fuel sales and lease profits from the West Texas Sale, partially offset by reduced expenses.
Pipeline Systems: The unit reported adjusted EBITDA of $188 million compared with $2 million in the prior-year quarter. This figure included one-time transaction-related expenses worth $5 million. The increase was primarily driven by the acquisition of NuStar.
Terminals: The segment reported adjusted EBITDA of $59 million, up from $25 million reported in the corresponding period of 2023. The rise was primarily due to the recent acquisitions of NuStar and Zenith European terminals.
In terms of volume, the partnership sold 2.2 billion gallons of fuel in the reported quarter. The figure was lower than our estimate of 2.5 billion gallons.
Motor fuel gross profit per gallon was 10.6 cents compared with the year-ago level of 11.8 cents.
Sunoco reported a total operating income of $237 million, which improved from a loss of $43 million in the prior-year quarter.
For the quarter that ended on Dec. 31, 2024, the net income was $141 million against a loss of $106 million in the fourth quarter of 2023.
Distributable Cash Flow
The adjusted distributable cash flow totaled $261 million, up from the year-ago level of $148 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses was $5.03 billion, down from $5.68 billion a year ago.
The partnership incurred a capital expenditure of $132 million, comprising $74 million in growth capital and $58 million in maintenance capital.
Balance Sheet
As of Dec. 31, 2024, Sunoco had cash and cash equivalents of $94 million and a net long-term debt of $7.48 billion.
Outlook
Sunoco projects full-year 2025 Adjusted EBITDA to be in the range of $1.90-$1.95 billion. Total operating expenses are projected to be between $900 million and $925 million, with growth capital expenditures of at least $400 million and maintenance capital expenditures of approximately $150 million.
SUN’s Zacks Rank and Other Key Picks
Currently, SUN carries a Zacks Rank #1 (Strong Buy).
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. As demand for LNG continues to grow, NextDecade’s strategic investments in infrastructure and its planned liquefaction capacity provide strong upside potential. With the global LNG market expanding, NextDecade is well-positioned to tap into the increasing export demand from the United States.
Range Resources is among the top 10 natural gas producers in the United States. Its diversified portfolio is spread between low-risk and long reserve-life Appalachian assets. The company’s extensive inventory of Marcellus resources with low breakeven points is a significant asset. With expanded LPG export capacity, RRC is well-positioned to meet the rising global demand, capitalizing on natural gas' role as a cleaner-burning fuel amid a low-carbon shift.
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SUN Misses on Q4 Earnings & Revenues, Hikes Distribution
Sunoco LP (SUN - Free Report) reported fourth-quarter 2024 earnings of 75 cents per unit, which missed the Zacks Consensus Estimate of $2.38. However, the bottom line improved from the year-ago quarter’s reported loss of $1.50 per unit.
Total quarterly revenues of $5.27 billion missed the Zacks Consensus Estimate of $5.74 billion. The top line also decreased from $5.64 billion reported in the year-ago quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The year-over-year increase in earnings can be attributed to lower total expenses and higher net income, partially offset by lower fuel margins.
Sunoco LP Price, Consensus and EPS Surprise
Sunoco LP price-consensus-eps-surprise-chart | Sunoco LP Quote
Distribution Hike
For the fourth quarter of 2024, the board of directors of Sunoco's general partner declared a distribution of $0.8865 per unit, or $3.5460 on an annualized basis. This marks a sequential increase from $0.8756 per unit, or $3.5024 annualized.
The distribution will be paid on Feb. 19, 2025, to common unitholders of record as of Feb. 7, 2025. The partnership is targeting a distribution growth rate of at least 5% for 2025 and plans to announce future increases on a quarterly basis.
Segmental Performance
Sunoco posts financial results under three reportable segments — Fuel Distribution, Pipeline Systems and Terminals.
Fuel Distribution: Adjusted EBITDA in the segment decreased to $192 million from $209 million in the comparable period of 2023. The segment was affected by lower fuel sales and lease profits from the West Texas Sale, partially offset by reduced expenses.
Pipeline Systems: The unit reported adjusted EBITDA of $188 million compared with $2 million in the prior-year quarter. This figure included one-time transaction-related expenses worth $5 million. The increase was primarily driven by the acquisition of NuStar.
Terminals: The segment reported adjusted EBITDA of $59 million, up from $25 million reported in the corresponding period of 2023. The rise was primarily due to the recent acquisitions of NuStar and Zenith European terminals.
In terms of volume, the partnership sold 2.2 billion gallons of fuel in the reported quarter. The figure was lower than our estimate of 2.5 billion gallons.
Motor fuel gross profit per gallon was 10.6 cents compared with the year-ago level of 11.8 cents.
Sunoco reported a total operating income of $237 million, which improved from a loss of $43 million in the prior-year quarter.
For the quarter that ended on Dec. 31, 2024, the net income was $141 million against a loss of $106 million in the fourth quarter of 2023.
Distributable Cash Flow
The adjusted distributable cash flow totaled $261 million, up from the year-ago level of $148 million.
Expenses & Capital Expenditure
The total cost of sales and operating expenses was $5.03 billion, down from $5.68 billion a year ago.
The partnership incurred a capital expenditure of $132 million, comprising $74 million in growth capital and $58 million in maintenance capital.
Balance Sheet
As of Dec. 31, 2024, Sunoco had cash and cash equivalents of $94 million and a net long-term debt of $7.48 billion.
Outlook
Sunoco projects full-year 2025 Adjusted EBITDA to be in the range of $1.90-$1.95 billion. Total operating expenses are projected to be between $900 million and $925 million, with growth capital expenditures of at least $400 million and maintenance capital expenditures of approximately $150 million.
SUN’s Zacks Rank and Other Key Picks
Currently, SUN carries a Zacks Rank #1 (Strong Buy).
Investors interested in the energy sector may look at some other top-ranked stocks like SM Energy Company (SM - Free Report) , NextDecade Corporation (NEXT - Free Report) and Range Resources Corporation (RRC - Free Report) . While SM Energy and NextDecade presently sport a Zacks Rank #1 each, Range Resources carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. As demand for LNG continues to grow, NextDecade’s strategic investments in infrastructure and its planned liquefaction capacity provide strong upside potential. With the global LNG market expanding, NextDecade is well-positioned to tap into the increasing export demand from the United States.
Range Resources is among the top 10 natural gas producers in the United States. Its diversified portfolio is spread between low-risk and long reserve-life Appalachian assets. The company’s extensive inventory of Marcellus resources with low breakeven points is a significant asset. With expanded LPG export capacity, RRC is well-positioned to meet the rising global demand, capitalizing on natural gas' role as a cleaner-burning fuel amid a low-carbon shift.