(SUN) - earnings expectations in seven out of the past nine quarters by an average margin of 19.8%

Sunoco, Inc. (SUN), a Zacks #1 Rank stock, topped the Street's earnings expectations in seven out of the past nine quarters by an average margin of 19.8%. Consensus estimates are on the rise for this quarter and the full year of 2006. The Board of Directors recently approved a quarterly dividend of 25 cents per share and a $500 million increase to its share repurchase program. SUN has a return on equity of 57%, compared to 32% for the industry average. Full Analysis Sunoco, Inc. manufactures and markets various petroleum products, including fuels, lubricants and some petrochemicals in the United States. The company operates in five segments: refining and supply, retail marketing, chemicals, logistics and coke. SUN exceeded analysts' earnings expectations in seven out of the past nine quarters by an average margin of 19.8%. The company's most recent positive surprise came on Aug 2, when SUN reported second-quarter profits of $426 million, or $3.22 per share. The Street was projecting $2.63 per share. In the prior-year period, the company posted profits of $242 million, or $1.75 per share. Revenues jumped 32.5% to $10.6 billion. Chairman and Chief Executive Officer John G. Drosdick stated, "Strong refining margins, particularly for ethanol-blended gasoline and low-sulfur diesel products, led to record quarterly earnings." For the first six months of 2006, SUN grew profits by 41.1% to $505 million, while revenues increased 26.3% to $19.2 billion. Earnings per share are forecasted to grow 12.2% over the next 3-5 years. The consensus earnings estimate for this quarter currently sits at $2.77. This represents a 23.7% increase over the past 90 days. For the full year of 2006, profit forecasts climbed 13.2% to $8.21 over the same period of time. On Jul 6, the Board of Directors announced a quarterly cash dividend of 25 cents per common share of stock, payable Sep 8, to shareholders of record as of Aug 8. The company is currently yielding 1.3% and has a five-year average dividend yield of 2.1%. Furthermore, the Board authorized an increase in the company's share repurchase program by an additional $500 million. SUN has approximately $109 million remaining on its previous $500 million program approved in March 2005. SUN increased revenues for the past seven years, while expanding margins and growing profits for three years running. The company's return on equity, a common measure of profitability, blows away the industry average--57% compared to 32%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home