SUN Misses on Q4 Earnings & Revenues, Hikes Distribution

Core Insights - Sunoco LP reported fourth-quarter 2024 earnings of 75 cents per unit, missing the Zacks Consensus Estimate of $2.38, but showing improvement from a loss of $1.50 per unit in the same quarter last year [1] - Total quarterly revenues were $5.27 billion, below the Zacks Consensus Estimate of $5.74 billion, and decreased from $5.64 billion reported in the year-ago quarter [1] Financial Performance - The year-over-year increase in earnings was attributed to lower total expenses and higher net income, partially offset by lower fuel margins [2] - Adjusted distributable cash flow totaled $261 million, up from $148 million in the previous year [8] - Total cost of sales and operating expenses decreased to $5.03 billion from $5.68 billion a year ago [9] Distribution and Capital Expenditure - The board declared a distribution of $0.8865 per unit for Q4 2024, marking an increase from $0.8756 per unit in the previous quarter, with a target growth rate of at least 5% for 2025 [3] - Capital expenditure for the quarter was $132 million, consisting of $74 million in growth capital and $58 million in maintenance capital [10] Segment Performance - Fuel Distribution segment reported adjusted EBITDA of $192 million, down from $209 million in the comparable period of 2023, affected by lower fuel sales [4] - Pipeline Systems segment reported adjusted EBITDA of $188 million, significantly up from $2 million in the prior-year quarter, driven by the acquisition of NuStar [5] - Terminals segment reported adjusted EBITDA of $59 million, up from $25 million in the corresponding period of 2023, primarily due to acquisitions [5] Volume and Profitability - The partnership sold 2.2 billion gallons of fuel in the reported quarter, lower than the estimated 2.5 billion gallons [6] - Motor fuel gross profit per gallon was 10.6 cents, down from 11.8 cents in the previous year [6] - Total operating income improved to $237 million from a loss of $43 million in the prior-year quarter [6] Balance Sheet and Outlook - As of December 31, 2024, Sunoco had cash and cash equivalents of $94 million and net long-term debt of $7.48 billion [11] - For full-year 2025, Sunoco projects Adjusted EBITDA in the range of $1.90-$1.95 billion, with total operating expenses projected between $900 million and $925 million [12]