We expect the energy pipelines and terminals operator
Sunoco Logistics Partners L.P.
) to beat expectations when it reports fourth quarter 2012
results after the closing bell on Wednesday, Feb 20.
Why a Likely Positive Surprise?
Our proven model shows that Sunoco Logistics is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Earnings Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), the difference between the Most Accurate estimate of 99 cents
and the Zacks Consensus Estimate of 91 cents, stands at
Zacks #3 Rank (Neutral):
Note that stocks with Zacks Ranks of #1, 2 and 3 have a
significantly higher chance of beating earnings. The Sell rated
stocks (#4 and 5) should never be considered going into an
The combination of Sunoco's Zacks Rank #3 (Hold) and 8.79% ESP
makes us confident in looking for a positive earnings beat on Feb
What's Driving the Better than Expected
The partnership continues to progress well on its growth
initiatives as evident from the recent successful completions of
open seasons for the Permian Express Phase I, Allegheny Access
and Mariner East projects.
Sunoco Logistics has delivered solid earnings results in the
third quarter, beating the Zacks Consensus Estimate by 28.24%. In
fact, it delivered positive earnings surprises in each of the
past 4 quarters, leading to a positive average earnings surprise
Most estimates were revised higher after the announcement of
third quarter results. Over the last 60 days, the Zacks Consensus
Estimate for the fourth quarter of 2012 grew 2.25% to 91 cents
With its low-risk and stable cash flow-generating energy
infrastructure assets, Sunoco Logistics offers investors an
opportunity to capture income growth through steadily rising cash
distributions and capital appreciation.
Other Stocks to Consider
Here are some other companies that warrant a look as these
have the right ingredients to report an earnings beat this
Northern Tier Energy LP
), earnings ESP of +3.65% and Zacks Rank #1 (Strong Buy).
Western Refining Inc.
), earnings ESP of +6.30% and Zacks Rank #2 (Buy).
W&T Offshore Inc.
), earnings ESP of +20.83% and Zacks Rank #3 (Hold).
NORTHERN TIER (NTI): Free Stock Analysis
SUNOCO LOGISTIC (SXL): Free Stock Analysis
WESTERN REFING (WNR): Free Stock Analysis
W&T OFFSHORE (WTI): Free Stock Analysis
To read this article on Zacks.com click here.