Sunoco LP (SUN)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered Adjusted EBITDA of $454M and $464M excluding one-time transaction-related expenses; Distributable Cash Flow, as adjusted, was $300M, while GAAP net income was $86M, reflecting tough comps versus the prior year’s West Texas asset sale gain .
• Revenue of $5.39B missed consensus by ~$0.15B, but normalized EPS beat by ~$0.29; primary EPS (SPGI definition) missed while normalized EPS beat, pointing to a non-GAAP outperformance narrative amid segment strength* [Q2 2025 estimates table below].
• Management reaffirmed FY 2025 Adjusted EBITDA guidance of $1.90–$1.95B and raised the quarterly distribution 1.25% to $0.9088, marking the third consecutive quarterly increase .
• Pipeline Systems and Terminals drove year-over-year EBITDA growth; Fuel Distribution softness was tied to lower cents-per-gallon and West Texas sale effects .
• Catalysts: guidance reaffirmation and distribution increase, ongoing Parkland acquisition (expected Q4 close) and accretion narrative from the call, and clarity on financing mix (senior notes/preferred equity)* .

What Went Well and What Went Wrong

What Went Well

• Adjusted EBITDA excluding one-time transaction costs reached $464M (up vs $400M in Q2 2024), with Pipeline Systems and Terminals materially higher YoY .
• Distribution increased 1.25% to $0.9088 per unit; management remains on track for at least 5% annual growth in 2025 .
• FY 2025 Adjusted EBITDA guidance reaffirmed ($1.90–$1.95B), indicating confidence in H2 execution .
  • “The partnership delivered a record second quarter with adjusted EBITDA of $464 million... and we are on track to deliver on our full-year guidance.”*

What Went Wrong

• Revenue declined YoY to $5.39B driven by fuel margin compression and West Texas sale impact; GAAP net income fell to $86M from $501M (prior year included a $598M gain on the West Texas sale) .
• Fuel Distribution segment Adjusted EBITDA fell to $206M (from $245M), hit by a $29M reduction in profit per gallon and higher expenses tied to pending Parkland acquisition .
• Consensus revenue was missed (~$5.54B est. vs $5.39B actual); primary EPS (SPGI) missed while normalized EPS beat, creating mixed headline optics despite underlying EBITDA strength* [Estimates table below].

Financial Results

Note: Margins marked with * retrieved from S&P Global.

Segment Adjusted EBITDA

KPIs

Balance Sheet and Capital

• Long-term debt ~$7.8B; liquidity remaining on $1.5B revolver ~$1.2B; leverage ratio 4.2x (net debt/Adj. EBITDA per revolver definition) .
• Q2 capital expenditures: $160M (growth $120M; maintenance $40M) .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Reports second quarter results, including net income of $86 million, Adjusted EBITDA… of $454 million and Distributable Cash Flow, as adjusted, of $300 million” .
• “Increases quarterly distribution by 1.25%; on track to meet distribution growth target of at least 5% for 2025” .
• “Reaffirms full year 2025 Adjusted EBITDA guidance of $1.90 billion to $1.95 billion, excluding one-time transaction-related expenses” .
• Segment drivers: Fuel Distribution down on lower profit per gallon and higher expenses tied to Parkland; Pipeline Systems up on NuStar timing/ET-S Permian formation and lower one-time G&A; Terminals up on acquired assets and lower one-time G&A .
• Call tone emphasized “record second quarter” and being “on track to deliver on our full-year guidance,” highlighting confidence in H2 execution and Parkland accretion potential* .

Q&A Highlights

• Parkland accretion: Management reiterated double-digit accretion expectations and comfort with diligence outcomes; Q4 close remains the timeline* .
• Financing clarity: ~$2.7B cash portion to be funded via a mix of senior notes and preferred equity; team highlighted opportunistic capital markets track record and constructive credit backdrop* .
• Distribution coverage/tax context: Commentary pointed to trailing 12-month distribution coverage ~1.9x and confidence in sustaining increases; call references suggested favorable tax planning supporting dividend equivalency framework* .

Estimates Context

Note: Values marked with * retrieved from S&P Global. Seeking Alpha also reported “EPS of $1.09 beats by $0.29; Revenue $5.39B (-12.7% YoY) misses by $149.5M,” aligning with normalized EPS beat context .

Key Takeaways for Investors

• Underlying EBITDA strength and reaffirmed FY guidance offset revenue miss optics; midstream/terminals now a larger earnings contributor .
• Fuel margin compression (10.5¢/gal) and West Texas sale effects are known headwinds; watch cents-per-gallon trajectory and mix shifts into H2 .
• Distribution growth continues with solid coverage and leverage ~4.2x—supportive of income thesis in an MLP structure .
• Parkland closing (Q4 target) and expected accretion are key stock catalysts; financing mix (notes/preferred) appears well telegraphed* .
• Short-term: trade around guidance reaffirmations and distribution announcements; monitor any regulatory approvals for Parkland and capital markets execution .
• Medium-term: focus on integration synergies, margins normalization, and capital discipline to sustain distributable cash flow growth .
• Note estimate framework differences: primary vs normalized EPS—normalized beat underscores non-GAAP outperformance despite GAAP diluted EPS of $0.33 ; estimates context relies on SPGI conventions*.

Additional Supporting Materials (Q2 2025)

• Press release: “Sunoco LP Reports Second Quarter 2025 Financial and Operating Results” .
• Distribution increase announcement: $0.9088 per unit (+1.25%) .
• Earnings release schedule (timing/logistics) .
• Company IR and PR sources confirming the Q2 2025 metrics and guidance .

Footnote: Values retrieved from S&P Global for consensus and certain margin metrics.