SunocoCorp NYSE: SUNC reported record third-quarter adjusted EBITDA of $1.06 billion, excluding approximately $11 million in one-time transaction expenses, as its fuel distribution, terminal and refining businesses posted strong results. The company said distributable cash flow as adjusted totaled $588 million for the quarter.
Senior Vice President of Finance Scott Grischow said the company increased its quarterly distribution by 1.25% from the prior quarter and by more than 10% from the third quarter of 2025. Sunoco announced on Oct. 22 a distribution of approximately $1.015 for both Sunoco LP common units and SunocoCorp shares.
The company reported a trailing 12-month distribution coverage ratio of 2.1 times, $2.3 billion of availability under its revolving credit facility at quarter-end and leverage of about 3.5 times, below its long-term target. Growth capital expenditures were $121 million during the quarter, while maintenance capital spending totaled $116 million.
Fuel Distribution Drives Earnings Growth
Chief Operating Officer Karl Fails said the Fuel Distribution segment generated adjusted EBITDA of $532 million, excluding $9 million in transaction expenses. That compared with $516 million in the preceding quarter and $238 million in the third quarter of 2025, also excluding transaction expenses.
The segment distributed about 4.2 billion gallons of fuel during the quarter and generated fuel margin of $0.168 per gallon. Volumes increased slightly from the second quarter, while margin declined slightly, Fails said.
Fails attributed the segment’s performance in part to the company’s ability to optimize gross profit amid market volatility, particularly in diesel. Tight distillate inventories, global supply disruptions, refinery outages and seasonal maintenance activity contributed to volatile market conditions, he said.
“We do not manage the business for an individual quarterly volume or margin outcome,” Fails said. “Instead, we manage for total fuel profit, EBITDA, and returns on deployed capital.”
The company also closed its $600 million acquisition of Offen Petroleum during the period following quarter-end. Fails said Offen adds approximately 2.5 billion gallons of annual fuel distribution volume and expands Sunoco’s presence in the Midwest and Mountain West. The acquisition is expected to provide additional supply, transportation and growth opportunities across branded and unbranded fuel operations.
Chief Executive Officer Joe Kim said Sunoco expects to exceed the high end of its 2026 guidance range. He added that the company expects 2026 to be its eighth consecutive year of EBITDA growth and said it is positioned for another record year in 2027 even if refining margins return closer to mid-cycle levels.
Midstream and Terminal Operations
The Pipeline Systems segment recorded adjusted EBITDA of $166 million, down from $190 million in the second quarter and $182 million in the prior-year quarter. Throughput was approximately 1.3 million barrels per day, essentially unchanged from both comparison periods.
Fails said the sequential decline reflected lower contributions from joint ventures and the absence of Federal Energy Regulatory Commission clawbacks that benefited the first half of the year. He said the segment’s core assets continue to generate stable income and offer opportunities to increase volumes and utilization through relatively modest capital investments.
Terminal segment adjusted EBITDA rose to $124 million, excluding $2 million of transaction expenses, from $115 million in the prior quarter and $76 million a year earlier. Throughput was about 1 million barrels per day, consistent with the second quarter.
The terminal results were supported by a strong quarter in transmix processing and continuing contributions from the company’s larger European network, according to Fails.
Burnaby Refinery Benefits From Favorable Margins
Sunoco’s refinery segment posted adjusted EBITDA of $238 million, compared with $175 million in the second quarter. The Burnaby refinery processed an average of 57,000 barrels per day, slightly above the prior quarter, while refining margin exceeded $54 per barrel. Expenses remained below $10 per barrel for the second consecutive quarter.
Fails said favorable market conditions helped results, alongside the operating team’s execution and expense management. Kim said the refinery represents “asymmetrical upside” for the broader portfolio when refining margins expand, while the company’s other segments provide more stable and growing income streams.
Kim said Sunoco is not seeking to expand its refining business on a standalone basis. However, he said the company would consider a transaction similar to the Parkland acquisition if it included a strong broader business that also happened to include a refinery.
Acquisition and Capital Plans
Kim said the company expects to maintain an active acquisition strategy. Earlier in 2026, management provided multiyear guidance for at least $500 million annually in bolt-on acquisitions. Kim said Sunoco expects to complete roughly $1.5 billion in bolt-on acquisitions in 2026 and, including organic growth capital, to deploy more than $2 billion.
Management characterized the $500 million annual bolt-on target as a “modest bar” for 2027 and beyond, citing opportunities across the company’s geographic footprint and business lines.
On operating expenses, Grischow said the company’s lower fuel distribution expense in the third quarter reflected its focus on operating as a low-cost provider as well as continued Parkland integration efforts. While he expects some sequential variation, Grischow said Sunoco expects operating expenses in 2027 to decline overall compared with 2026.
Chief Commercial Officer Austin Harkness said U.S. fuel demand has remained resilient despite fuel-price volatility, with diesel demand roughly flat year over year and gasoline demand down by low single digits, based on monthly Energy Information Administration data. In Canada, where fuel-price volatility has been more pronounced, he said diesel and gasoline demand declined by low- to mid-single digits, while margins remained strong.
About SunocoCorp (NYSE:SUNC)
Sunoco LP is an energy infrastructure and fuel distribution master limited partnership. Sunoco LP is based in DALLAS.
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