SUN Misses on Q1 Earnings & Revenues, Hikes Distribution

Sunoco LP SUN reported first-quarter 2025 earnings of $1.21 per unit, which missed the Zacks Consensus Estimate of $1.69. However, the bottom line improved from the year-ago quarter’s $1.06 per unit. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Total quarterly revenues of $5.18 billion missed the Zacks Consensus Estimate of $5.32 billion. The top line also decreased from $5.50 billion reported in the year-ago quarter.

The year-over-year increase in earnings can be attributed to lower total expenses and higher fuel margins, partially offset by lower net income.

Sunoco LP Price, Consensus and EPS Surprise

Sunoco LP price-consensus-eps-surprise-chart | Sunoco LP Quote

Distribution Hike

For the first quarter of 2025, the board of directors of Sunoco's general partner declared a distribution of $0.8976 per unit, or $3.5904 on an annualized basis. This marks a sequential increase from $0.8865 per unit, or $3.5460 annualized.

The distribution will be paid on May 20, 2025, to common unitholders of record as of May 9, 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 increased to $220 million from $218 million in the comparable period of 2024. The segment was affected by lower fuel sales and lease profits, partially offset by reduced expenses.

Pipeline Systems: The unit reported adjusted EBITDA of $172 million. The segment was aided by the acquisition of NuStar.

Terminals: The segment reported adjusted EBITDA of $66 million, up from $24 million reported in the corresponding period of 2024. The rise was primarily due to the recent acquisitions of NuStar and Zenith European terminals.

In terms of volume, the partnership sold 2.1 billion gallons of fuel in the reported quarter. The figure was lower than our estimate of 2.3 billion gallons.

Motor fuel gross profit per gallon was 11.5 cents compared with the year-ago level of 10.9 cents.

Sunoco reported a total operating income of $296 million, which declined from $297 million in the prior-year quarter.

For the quarter that ended on March 31, 2025, the net income was $207 million compared with $230 million in the first quarter of 2024.

 Distributable Cash Flow

The adjusted distributable cash flow totaled $310 million, up from the year-ago level of $176 million.

Expenses & Capital Expenditure

The total cost of sales and operating expenses was $4.88 billion, down from $5.20 billion a year ago.

The partnership incurred a capital expenditure of $101 million, comprising $75 million in growth capital and $26 million in maintenance capital.

Balance Sheet

As of March 31, 2025, Sunoco had cash and cash equivalents of $172 million and a net long-term debt of $7.67 billion.

Outlook

Sunoco has reaffirmed its 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 Key Picks

Currently, SUN carries a Zacks Rank #5 (Strong Sell).

Investors interested in the energy sector may look at some better-ranked stocks that presently carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Nabors Industries Ltd. NBR reported a first-quarter 2025 adjusted loss of $7.5 per share, which was wider than the Zacks Consensus Estimate of a loss of $2.64. This underperformance was mainly due to lower adjusted operating income from its U.S. Drilling segment.

As of March 31, 2025, this company had $404.1 million in cash and short-term investments. Nabors expects an adjusted free cash flow of $80 million for 2025, excluding any impact of tariffs. NBR has a Zacks Style Score of A for Value.

RPC Inc. RES reported first-quarter 2025 adjusted earnings of 6 cents per share, which missed the Zacks Consensus Estimate of 7 cents. The bottom line declined from the year-ago figure of 13 cents. The weak quarterly earnings primarily resulted from flat pressure pumping revenues and slightly declining performance across other service lines.

As of March 31, 2025, RES had cash and cash equivalents of $326.7 million and maintained a debt-free balance sheet. RPC has a Zacks Style Score of A for Value and Momentum.

EQT Corporation. EQT reported first-quarter 2025 adjusted earnings per share of $1.18, which beat the Zacks Consensus Estimate of $1.02. The bottom line improved year over year. EQT’s strong quarterly results were driven by higher sales volume and increased average realized prices.

As of March 31, 2025, EQT reported $281 million in cash and cash equivalents. At the quarter's end, its long-term debt amounted to $8.39 billion. 

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This article originally published on Zacks Investment Research (zacks.com).

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