Sunoco Q1 Earnings Exceeds Estimates, 2023 Guidance Raised On Zenith Acquisition

Sunoco LP SUN reported Q1 2023 revenues of $5.36 billion, which exceeded the consensus of $4.91 billion.
The Partnership sold 1.9 billion gallons of fuel (+9% Y/Y), with the Fuel margin for all gallons sold coming in at 12.9 cents per gallon (vs 12.4 cents per gallon in the prior year quarter).
Adjusted EBITDA rose to $221 million from $191 million a year ago.
EPS of $1.41 surpassed the consensus of $1.27.
Adjusted distributable cash flow of $160 million was higher than $142 million a year ago.
Total capital expenditures were $37 million in Q1, including $29 million for growth capital and $8 million for maintenance capital.
On April 24, SUN increased quarterly distribution by 2% to $0.8420 per unit.
On May 1, the company closed the acquisition of 16 refined product terminals from Zenith Energy for $110 million.
Outlook: To include the Zenith acquisition, SUN raised 2023 adjusted EBITDA guidance to $865 million-$915 million (from $850 million-$900 million earlier).
Also, it increased guidance for operating expenses to $540 million-$550 million (from $525 million-$535 million earlier) and maintenance capital expenditures to around $65 million (vs. $60 million earlier) in 2023.
The company continues to expect capital expenditures of at least $150 million in 2023.
Price Action: SUN shares are trading lower by 1.58% at $45.31 on the last check Tuesday.

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