Sunoco LP Reports Q2 Earnings Miss, Raises Distribution Amid Lower Fuel Profit Per Gallon

Sunoco LP reported Q2 2025 earnings of 33 cents per unit, missing the Zacks Consensus Estimate of $1.68. Revenues of $5.39 billion also missed the estimate of $5.62 billion. The company raised its distribution by 1.25% to $0.9088 per unit. The Fuel Distribution segment's adjusted EBITDA declined to $206 million from $245 million in the same period last year.

Sunoco LP (NYSE: SUN) reported its second-quarter 2025 earnings on Wednesday, with net income falling to $86 million, a significant decline from the $501 million reported in the same period last year. The company's shares fell 1.89% in pre-market trading following the announcement. Adjusted earnings per share (EPS) were $0.33, well below the analyst estimate of $1.18. Revenue came in at $5.39 billion, missing the consensus estimate of $5.86 billion [1].

Despite the earnings miss, Sunoco's adjusted EBITDA, excluding one-time transaction-related expenses, rose to $464 million from $400 million in the second quarter of 2024. The Fuel Distribution segment saw a decline in performance, with profit per gallon dropping to 10.5 cents compared to 11.8 cents in the prior-year period. However, the Pipeline Systems and Terminals segments showed improved results, benefiting from the company's acquisition of NuStar last year [1].

Sunoco increased its quarterly distribution by 1.25% to $0.9088 per unit, marking the third consecutive quarterly increase. The company remains on track to meet its distribution growth target of at least 5% for 2025. Management reaffirmed its full-year 2025 adjusted EBITDA guidance of $1.90 billion to $1.95 billion, excluding one-time transaction-related expenses. The company also noted that its pending merger with Parkland remains on schedule and is expected to close in the fourth quarter of 2025 [1].

During the earnings call, Sunoco's President and Chief Executive Officer, Scott Grischow, highlighted the company's strong financial position and its track record of generating increasing distributable cash flow per unit. He also mentioned the company's ongoing investments in growth capital and maintenance capital, which totaled $160 million in the second quarter [2].

The Fuel Distribution segment's adjusted EBITDA declined to $206 million from $245 million in the same period last year. However, the company expects its accretive investments in this segment to yield increased volume and EBITDA in the back half of the year and to support another record year in this segment [2].

In the Pipeline Systems segment, adjusted EBITDA for the quarter was $177 million, up from $172 million in the first quarter and $111 million in the second quarter of last year. The Terminal segment delivered adjusted EBITDA of $73 million, up from $66 million in the first quarter and $43 million in the second quarter of last year [2].

Sunoco's CEO, Joseph Kim, expressed confidence in the company's ability to deliver on its full-year guidance and highlighted the expected benefits of the Parkland acquisition. He also mentioned the company's acquisition of TanQuid, terminal assets in Germany and Poland, which is expected to close early in the fourth quarter [2].

Sunoco LP's earnings report indicates a challenging second quarter, with significant misses in EPS and revenue estimates. However, the company's strong financial position, ongoing investments in growth, and the expected benefits of its acquisitions provide a positive outlook for the remainder of the year.

References:
[1] https://www.investing.com/news/earnings/sunoco-lp-misses-q2-earnings-estimates-as-profit-falls-sharply-93CH-4172978
[2] https://www.insidermonkey.com/blog/sunoco-lp-nysesun-q2-2025-earnings-call-transcript-1585803/