Sunoco (SUN) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
Sunoco LP SUN 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.
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 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.
Zacks Rank & Other Stocks to Consider
Sunoco currently carries a Zacks Rank #2 (Buy).
Some other top-ranked players in the energy sector are Liberty Energy Inc. LBRT, Matador Resources Company MTDR and Oceaneering International, Inc. OII, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Liberty reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 74 cents. The Denver-CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.
The company’s board of directors announced a cash dividend of 7 cents per common share, payable on Dec 20, 2023, to stockholders of record as of Dec 6, 2023. The dividend increased 40% from the previous quarter’s level.
Matador Resources reported third-quarter 2023 adjusted earnings of $1.86 per share, which beat the Zacks Consensus Estimate of $1.59. MTDR’s milestone led to better-than-expected third-quarter results, with the highest-ever total production averaging more than 135,000 barrels of oil and natural gas equivalent per day.
For the fourth quarter of 2023, MTDR expects an average daily oil equivalent production of 145,000 BOE. The recent guidance indicates a 2% upward revision from the previously mentioned 143,000 BOE/D.
Oceaneering International reported third-quarter 2023 adjusted earnings of 38 cents per share, which beat the Zacks Consensus Estimate of 27 cents. OII’s outperformance was largely due to robust results in certain segments.
For the fourth quarter of 2023, the company anticipates a decline in EBITDA on relatively flat revenues compared with the third-quarter results.
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