Philadelphia-based Sunoco Logistics Partners L.P. (SXL) is a master limited partnership (MLP) that acquires, owns, and operates a geographically diverse portfolio of refined product and crude oil pipelines and terminal facilities.   Sunoco Logistics reported solid second-quarter results, reflecting higher lease acquisition results, increased fees, and contributions from the recent MagTex acquisition. Importantly, the partnership increased its quarterly cash distribution by 11.2% year over year to the annualized rate of $4.16 per unit. With its stable fee-based revenue, geographically diverse assets, and strong business fundamentals, Sunoco Logistics offers investors an opportunity to capture income growth through steadily rising cash distributions and capital appreciation.   We also believe that the partnership’s synergistic relationship with its general partner, Sunoco Inc. (SUN) adds to its positive attributes by providing Sunoco Logistics with stable cash flows and consistent top-line growth opportunities.   At the same time, we remain concerned with Sunoco ...

Yesterday, oil refiner and marketer Sunoco Inc. (SUN) announced certain strategic actions to improve the company’s performance and competitiveness in a cost-effective manner, as it struggles to cope with the bearish refining margin environment. Sunoco said that it would indefinitely idle a New Jersey refinery, furlough 400 workers and cut its dividend in half. The company hopes that these measures will save $320 million annually, though this would also lead to $475–$550 million in largely non-cash financial charges over the next few quarters. Sunoco has decided to shut down its 145,000 barrels-per-day Eagle Point refinery in Westville, NJ, until market conditions improve. In the meantime, the company will shift production from Eagle Point to its refineries in Philadelphia and Marcus Hook, PA, and may use the idled refinery to produce alternative fuels. The Philadelphia and Marcus Hook facilities will up their utilization rates to make up ...