What caused SUN's Q4 earnings to drop sharply?

Sunoco LP (NYSE:SUN) experienced a significant drop in its Q4 2024 earnings, with a reported EPS of $0.75, missing the analysts' consensus estimates of $1.48 by $0.73. This shortfall can be attributed to several key factors:

1. **Revenue Decline**: Sunoco's Q4 revenue fell by 6.6% year-over-year, amounting to $5.27 billion. This decline was more pronounced than the expected decrease, with the Zacks Consensus Estimate having forecasted $5.74 billion, a surprise of -8.20%. The company's Motor Fuel gallons sold were below expectations, coming in at 2,151 Mgal versus the two-analyst average estimate of 2,169.33 Mgal. This indicates a decrease in the volume of fuel sold, which directly impacts revenue.
2. **Segmental Performance Issues**: The Segment Adjusted EBITDA for Fuel Distribution was reported at $192 million, which is significantly lower than the two-analyst average estimate of $291.33 million. Similarly, the Segment Adjusted EBITDA for Terminals was $59 million, below the two-analyst average estimate of $58.92 million. These shortfalls in key operational metrics contribute to the overall earnings disappointment.

In summary, Sunoco's Q4 earnings drop can be attributed to a combination of lower-than-expected revenue due to decreased fuel gallons sold and weaker performance in key segments such as Fuel Distribution and Terminals.