Core Insights - Sunoco LP reported revenue of $5.27 billion for the quarter ended December 2024, a decrease of 6.6% year-over-year [1] - The earnings per share (EPS) was $0.75, a significant improvement from -$1.50 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $5.74 billion by 8.20%, and the EPS was 68.49% below the consensus estimate of $2.38 [1] Financial Performance Metrics - Motor fuel gallons sold were 2,151 million gallons, slightly below the two-analyst average estimate of 2,169.33 million gallons [4] - Segment Adjusted EBITDA for Fuel Distribution was $192 million, significantly lower than the average estimate of $291.33 million [4] - Segment Adjusted EBITDA for Terminals was $59 million, in line with the average estimate of $58.92 million [4] - Segment Adjusted EBITDA for Pipeline Systems was $188 million, exceeding the average estimate of $115.52 million [4] Stock Performance - Over the past month, shares of Sunoco LP returned -1.7%, compared to a -5.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - Energy stocks are highlighted as beneficial for portfolio income and growth, with the oil and gas sector expected to remain robust due to ample supply from new exploration [2] Group 2 - The article emphasizes the importance of performing due diligence and drawing personal conclusions before making investment decisions [4] - Seeking Alpha clarifies that past performance does not guarantee future results and that no specific investment recommendations are provided [5]

Core Insights - Sunoco LP filed its operational and financial results for the fiscal year ended December 31, 2024, on February 14, 2025, with the U.S. Securities and Exchange Commission [1] - The Annual Report on Form 10-K is accessible on the Partnership's website and the SEC's website [1] Company Overview - Sunoco LP is a leading energy infrastructure and fuel distribution master limited partnership operating in over 40 U.S. states, Puerto Rico, Europe, and Mexico [3] - The Partnership's midstream operations include approximately 14,000 miles of pipeline and over 100 terminals, supporting its fuel distribution operations [3] - Sunoco LP serves approximately 7,400 Sunoco and partner branded locations, along with additional independent dealers and commercial customers [3] - The general partner of Sunoco LP is owned by Energy Transfer LP [3]

Distribution and Cash Flow - The company is required to distribute all available cash to unitholders, which may limit its ability to grow and make acquisitions [233]. - The partnership agreement allows the General Partner to determine the amount and timing of distributions, potentially affecting cash available for unitholders [232]. - Cost reimbursements to the General Partner will reduce cash available for distribution to unitholders [232]. - The amount of cash available for distribution depends primarily on cash flow, not solely on profitability, which may lead to distributions during net losses [247]. - Unitholders may have liability to repay distributions if they are deemed impermissible under Delaware law [248]. - The partnership is subject to entity-level Texas franchise tax, which could reduce cash available for distribution [259]. - Changes in U.S. federal income tax laws could negatively impact the value of investments in common units [263]. - Subsidiaries treated as corporations for tax purposes may incur corporate-level taxes, reducing cash available for distribution [265]. - Unitholders will owe taxes on allocated taxable income even if no cash distributions are received [266]. - The IRS may challenge the partnership's tax positions, which could adversely impact the market for common units and reduce cash available for distribution to unitholders [271]. Governance and Control - Energy Transfer controls the General Partner and appoints all officers and directors, leading to potential conflicts of interest [228]. - The General Partner has limited liability regarding obligations, which may result in the company incurring nonrecourse debt [229]. - Common unitholders have limited voting rights and cannot easily remove the General Partner without significant support [240]. - The partnership agreement restricts voting rights for unitholders owning 20% or more of outstanding common units [246]. - Unitholders may be required to sell their common units at an undesirable time or price if the General Partner exercises its limited call right [243]. - The partnership agreement permits the issuance of additional units without unitholder approval, which could dilute existing distributions [234]. - The partnership agreement allows the issuance of additional units without unitholder approval, potentially diluting existing ownership interests [244]. Financial Performance - Total segment profit increased to $2,098 million in 2024 from $1,365 million in 2023, a change of $733 million [349]. - Fuel Distribution segment profit decreased to $1,187 million in 2024 from $1,225 million in 2023, a decline of $38 million [351]. - Pipeline Systems segment profit surged to $535 million in 2024 from $3 million in 2023, an increase of $532 million [352]. - Terminals segment profit rose to $376 million in 2024 from $137 million in 2023, an increase of $239 million [354]. - Motor fuel gallons sold increased by 261 million gallons, totaling 8,578 million gallons in 2024 compared to 8,317 million gallons in 2023 [351]. - Segment Adjusted EBITDA is used as a key performance measure for evaluating segment profitability and is a basis for internal financial reporting [347]. - Segment Adjusted EBITDA for Fuel Distribution increased to $908 million in 2024 from $865 million in 2023, an increase of $43 million [351]. - Segment Adjusted EBITDA for Pipeline Systems increased to $377 million in 2024 from $11 million in 2023, an increase of $366 million [352]. Debt and Financing - The company may face increased vulnerability to adverse economic conditions due to its debt levels and covenants [225]. - Total long-term debt increased to $7,484 million in 2024 from $3,580 million in 2023, reflecting the acquisition of NuStar [371]. - As of December 31, 2024, the balance on the Credit Facility was $203 million, with $1.25 billion in unused availability [372]. - The Partnership issued $750 million of 7.000% senior notes due 2029 and $750 million of 7.250% senior notes due 2032 on April 30, 2024 [373]. - The Partnership redeemed NuStar's subordinated notes totaling $403 million and repaid NuStar's credit facility totaling $455 million during Q2 2024 [374]. - The net proceeds from the recent financing transaction were used to repay certain outstanding indebtedness and fund the redemption of NuStar's preferred units [373]. - The Partnership does not maintain any off-balance sheet arrangements for credit enhancement or hedging transactions [380]. Taxation - Tax-exempt entities investing in common units may face unrelated business taxable income, which could result in adverse tax consequences [270]. - Non-U.S. unitholders will be subject to U.S. federal income taxes and withholding on income effectively connected with a U.S. trade or business [282]. - The income tax expense for 2024 was $175 million, an increase of $139 million from 2023, primarily due to a taxable gain recognized on the sale of convenience stores [346]. - The partnership recorded unfavorable inventory adjustments of $86 million and $114 million for the years ended December 31, 2024 and 2023, respectively, which decreased net income for those periods [343]. - The increase in equity in earnings of unconsolidated affiliates for the year ended December 31, 2024, was primarily due to the formation of ET-S Permian effective July 1, 2024 [344]. - Unrealized gains and losses on commodity derivatives reflect changes in fair value, impacted by notional amounts and commodity price changes [342]. Assets and Compliance - Current assets for the Guarantor Issuer Group were $2.225 billion, while non-current assets totaled $11.119 billion as of December 31, 2024 [378]. - The Partnership's long-term liabilities, including long-term debt, amounted to $8.244 billion as of December 31, 2024 [378]. - The Partnership is in compliance with all financial covenants as of December 31, 2024 [372]. - The Partnership had a position of 0.3 million barrels in fuel hedging with an aggregated unrealized loss of $3.8 million at December 31, 2024 [379].

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]

Financial Data and Key Metrics Changes - In Q4 2024, adjusted EBITDA was $446 million, excluding approximately $7 million of one-time transaction expenses, with distributable cash flows adjusted at $261 million [6][11] - Full-year 2024 adjusted EBITDA was $1.56 billion, a 62% increase compared to 2023 [7][12] - The trailing twelve-month coverage ratio at the end of the quarter was 1.9 times, with leverage at 4.1 times, flat to the last quarter [9][10] Business Line Data and Key Metrics Changes - Fuel distribution segment adjusted EBITDA was $192 million, down from $253 million in Q3 2024 and $209 million in Q4 2023, with 2.2 billion gallons distributed [16] - Pipeline systems segment adjusted EBITDA for Q4 was $193 million, up from $147 million in Q3, with throughput of 1.4 million barrels per day [20] - Terminal segment adjusted EBITDA for Q4 was $61 million, down from $70 million in Q3, with throughput around 600,000 barrels per day [22] Market Data and Key Metrics Changes - The company reported increased volumes across nearly all major pipeline systems due to consistent refinery operations and seasonal demand growth in the Mid-Con region [21] - The overall market dynamics and internal capabilities are expected to support continued growth in 2025 [19] Company Strategy and Development Direction - The integration of the NuStar acquisition has strengthened the company's portfolio, providing income diversification across three stable business segments [28] - The company aims for a distribution growth of at least 5% in 2025, with a focus on strong operational execution and expense discipline [11][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term demand for refined products, emphasizing that these products will continue to fuel economies for decades [60] - The company is well-positioned to capitalize on market opportunities, with a strong foundation and asset base following the NuStar acquisition [42] Other Important Information - The company declared a distribution of $0.8865 per unit, a 1.25% increase over the previous quarter, ahead of the typical timing for distribution increases [11] - The company has a strong liquidity position with approximately $1.3 billion remaining on its revolving credit facility [9] Q&A Session Summary Question: Insights on fuel distribution and outlook for 2025 - Management acknowledged that the lack of volatility in gasoline and diesel prices impacted Q4 results but emphasized strong fundamentals for 2024 overall [35][41] Question: Impact of tariffs on business - Management noted that higher tariffs could lead to higher prices, and the company has a strong track record in volatile commodity environments [44][46] Question: Growth CapEx spending cadence - Management indicated that growth CapEx is primarily for optimization rather than large projects, allowing flexibility in spending [48][50] Question: Outlook on refined product demand - Management reiterated a bullish view on the long-term attractiveness of the refined product sector, despite recent market focus on other energy sources [58][60] Question: Future M&A opportunities - Management expressed interest in growth opportunities in Europe and the Caribbean, emphasizing criteria for stable cash flows and synergy potential [78][80]

Financial Performance - Net income for Q4 2024 was $141 million, a significant recovery from a net loss of $106 million in Q4 2023 [2][5] - Adjusted EBITDA for Q4 2024 reached $439 million, up from $236 million in Q4 2023, including approximately $7 million in one-time transaction-related expenses [2][6] - Distributable Cash Flow, as adjusted, for Q4 2024 was $261 million compared to $148 million in Q4 2023 [3][6] - For the full year 2024, net income was $874 million, compared to $394 million in 2023 [5][6] - Adjusted EBITDA for the full year 2024 was $1.46 billion, up from $964 million in 2023, including $106 million in one-time transaction-related expenses [6][11] Segment Performance - Fuel Distribution segment Adjusted EBITDA for Q4 2024 was $192 million, down from $209 million in Q4 2023, with fuel sales of approximately 2.2 billion gallons [3][28] - Pipeline Systems segment Adjusted EBITDA for Q4 2024 was $188 million, with throughput averaging approximately 1.4 million barrels per day [4][34] - Terminals segment Adjusted EBITDA for Q4 2024 was $59 million, an increase from $25 million in Q4 2023, with throughput averaging approximately 590 thousand barrels per day [5][37] Distribution and Growth Outlook - The Board declared a distribution of $0.8865 per unit for Q4 2024, with an annualized rate of $3.5460 per unit, targeting a distribution growth rate of at least 5% for 2025 [7][11] - Full-year 2025 Adjusted EBITDA is expected to be in the range of $1.90 billion to $1.95 billion [11][12] Capital Expenditures and Liquidity - Total capital expenditures in Q4 2024 were $132 million, including $74 million for growth and $58 million for maintenance [9] - As of December 31, 2024, long-term debt was approximately $7.5 billion, with $1.3 billion of liquidity remaining on its revolving credit facility [8]

Core Viewpoint - Sunoco LP announced a quarterly distribution increase of 1.25% for Q4 2024, reflecting a strong financial outlook and commitment to growth [1][5]. Company Overview - Sunoco LP is a leading energy infrastructure and fuel distribution master limited partnership operating in over 40 U.S. states, Puerto Rico, Europe, and Mexico [2]. - The Partnership's midstream operations include approximately 14,000 miles of pipeline and over 100 terminals, supporting its fuel distribution operations [2]. - Sunoco LP serves around 7,400 branded locations and additional independent dealers and commercial customers [2]. Financial Performance - The declared quarterly distribution for Q4 2024 is $0.8865 per common unit, which annualizes to $3.5460 per common unit [1]. - This distribution represents the third consecutive increase in the annual distribution growth rate [5]. - The company targets a distribution growth rate of at least 5% for 2025, with future increases to be announced quarterly [5]. Tax Information - All distributions to foreign investors are subject to federal tax withholding at the highest applicable effective tax rate, as they are attributable to income effectively connected with a U.S. trade or business [4].

Company Performance - Sunoco LP (SUN) closed at $54.73, with a slight increase of +0.26% from the previous trading session, underperforming compared to the S&P 500's gain of 0.88% [1] - The stock has risen by 6.04% over the past month, contrasting with the Oils-Energy sector's loss of 0.38% and the S&P 500's gain of 1.17% [1] Earnings Expectations - Sunoco LP is expected to report earnings on February 11, 2025, with an anticipated EPS of $2.46, representing a significant 264% increase compared to the same quarter last year [2] - The consensus estimate projects revenue of $5.74 billion, reflecting a 1.75% increase from the equivalent quarter last year [2] Analyst Estimates - Recent changes to analyst estimates for Sunoco LP indicate a positive outlook, suggesting analyst optimism regarding the company's business and profitability [3] - The Zacks Rank system, which incorporates these estimate changes, currently ranks Sunoco LP as 1 (Strong Buy), indicating strong potential for stock performance [5] Valuation Metrics - Sunoco LP has a Forward P/E ratio of 5.65, which is significantly lower than its industry's Forward P/E of 23.82, indicating a valuation discount [6] - The Oil and Gas - Refining and Marketing - Master Limited Partnerships industry, to which Sunoco LP belongs, has a Zacks Industry Rank of 48, placing it in the top 20% of over 250 industries [6]

Investors might want to bet on Sunoco LP (SUN) , as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this master limited partnership, should get reflected in its stock price. After all, empirical research shows a strong correlation ...