By Philadelphia Business Journal

Sunoco Logistics Partners LPâ¿¿s second-quarter results fell short of analystsâ¿¿ earnings estimates but easily beat revenue estimates.

In addition to releasing its results, the Philadelphia-based partnership, which is controlled by Philadelphia-based oil refiner Sunoco Inc. (NYSE:SUN), said Tuesday it has exercised rights to increase its stake in three pipeline companies.

Sunoco Logistics (NYSE:SXL) earned $50.9 million, or $1.29 per diluted limited partner unit in the quarter. The average estimate of 11 analysts polled by Thomson Reuters was that it would earn $1.37 per diluted unit in the quarter.

Earnings were $66.6 million, or $1.74 per basic unit, in the second quarter of 2009. The partnership attributed the decline in earnings from last year to higher interest expense associated with senior notes it issued this year and the fact that the crude oil market is no longer in contango, which occurs when the futures price of a commodity is higher than its expected future spot price.

Revenue was $2.04 billion, up from $1.28 billion in the second quarter of lastyear. The average revenue estimate of seven analysts polled by Thomson Reuters was $1.68 billion. The partnership attributed the revenue increase to higher crude oil prices.

Sunoco Logistics exercised rights to increase its stakes in Mid-Valley Pipeline Co., West Texas Pipeline Co. and West Shore Pipeline Co. It expects to pay $100 million for the increased stakes and will finance their purchase with its revolving credit facilities pending more permanent financing. The partnership expects to close on the acquisitions in 30 days and expects they will immediately add to its earnings.

Sunoco Logistics owns and operates pipelines and terminals that transport and store crude oil and products refined from crude oil.

Copyright 2010 American City Business Journals

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