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Suncor Energy (SU) Q1 Earnings Rise Y/Y, Sales Top Estimates
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Suncor Energy Inc. (SU - Free Report) reported first-quarter 2024 adjusted operating earnings of C$1.41 per share, up from the prior-year quarter's level of C$1.36. The outperformance could be primarily attributed to increases in oil sands production and strong demand for refined products.
Operating revenues of $9.3 billion beat the Zacks Consensus Estimate by 7.6%. The top line also increased approximately 2.5%.
Suncor Energy’s board of directors approved a quarterly dividend of 54.5 Canadian cents per share, on its common shares, payable on Jun 25, 2024, to shareholders of record at the close of business on Jun 4.
Alberta-based integrated energy company distributed C$1 billion to its shareholders, consisting of C$700 million in dividends and C$300 million in share repurchases during the quarter under review.
Suncor reached a new milestone in oil sands production, hitting an all-time quarterly high. This is attributed to the increased working interest in Fort Hills and record fire bag production. Additionally, the company posted its highest-ever refining throughput and recorded peak refined product output.
Suncor Energy Inc. Price, Consensus and EPS Surprise
Upstream: Total production in this segment increased 3.3% year over year to 835,000 barrels of oil equivalent per day (boe/d) from 742,100 boe/d.
The company’s exploration and production volume (international, offshore and natural gas) slipped 24.9% to 50,300 boe/d from 67,000 boe/d in the year-ago quarter. This was due to the divestment of SU’s U.K. portfolio and the absence of production from White Rose.
Adjusted operating earnings totaled C$1.81 billion compared with C$1.82 billion in the year-ago quarter.
Operating cost per barrel decreased to C$26.85 from C$29.6 in the corresponding period of 2023. Upgrader utilization increased to 107% from 95% a year ago.
Bitumen production rose to 240,000 boe/d from 177,300 boe/d in the previous year. This increase was driven by higher overall production levels.
Oil sands production climbed to 545,000 boe/d from 497,800 boe/d a year earlier. This improvement stemmed from robust asset performance at Oil Sands Base.
Fort Hills reported an average first-quarter volume of 177,600 barrels per day (bpd), higher than the year-ago quarter’s level of 74,700 bpd.
The cash operating cost per barrel dropped to C$32.85 from C$41.4 in the prior-year period. This decrease in cost was due to the increased production volumes.
Downstream: Adjusted operating earnings from the unit increased to C$1.1 billion from the year-ago quarter’s reported figure of C$998 million. The growth in adjusted operating earnings was mainly driven by higher refinery production and a FIFO inventory valuation gain during the reviewed quarter.
Refined product sales totaled 581,000 bpd, up from the prior-year quarter’s level of 514,800 bpd. Strong refinery output and the company's effective use of its extensive domestic sales network and export channels were key factors for the results during this period.
Refinery crude throughput totaled 455,300 bpd compared with 367,700 bpd in the year-ago period. Refinery utilization was 98% compared with 79% a year ago. The increase in refinery crude throughput was due to strong utilization rates across all refineries during the quarter under review.
Financial Position
Total expenses increased 8% to C$10.3 billion from the prior-year quarter.
Cash flow from operating activities amounted to C$2.8 billion, up from the prior-year quarter’s level of C$1 billion. Suncor Energy incurred capital expenditures worth C$1.3 billion in the first quarter of 2024.
As of Mar 31, 2024, the company had cash and cash equivalents of C$2.5 billion and long-term debt of C$11.3 billion. Its total debt to total capital was 21.3%.
Guidance
SU expects production in the range of 770,000-810,000 boe/d for 2024.
Oil Sands operations yield is anticipated in the band of 430,000-460,000 bbls/d, while the same for Fort Hills is projected in the 155,000-165,000 bbls/d range. Syncrude and Exploration and Production operations yield is expected in the range of 175,000-190,000 bpd and 45,000-55,000 boe/d, respectively.
While we have discussed the company’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
Independent oil and natural gas company Magnolia Oil & Gas Corporation (MGY - Free Report) announced adjusted net income of 49 cents per share, which beat the Zacks Consensus Estimate of 44 cents. However, the bottom line deteriorated from the year-ago quarter’s level of 56 cents.
Total revenues came in at $319.4 million, which beat the Zacks Consensus Estimate of $308 million. The top line also improved 3.6% from $308.4 million recorded in the year-ago period. As of Mar 31, 2024, the company had cash and cash equivalents worth $399.3 million and long-term debt of $393.5 million, with debt to total capital of about 17.2%.
SLB (SLB - Free Report) , the largest oilfield contractor, delivered earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure, however, was above our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. The figure was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.
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Suncor Energy (SU) Q1 Earnings Rise Y/Y, Sales Top Estimates
Suncor Energy Inc. (SU - Free Report) reported first-quarter 2024 adjusted operating earnings of C$1.41 per share, up from the prior-year quarter's level of C$1.36. The outperformance could be primarily attributed to increases in oil sands production and strong demand for refined products.
Operating revenues of $9.3 billion beat the Zacks Consensus Estimate by 7.6%. The top line also increased approximately 2.5%.
Suncor Energy’s board of directors approved a quarterly dividend of 54.5 Canadian cents per share, on its common shares, payable on Jun 25, 2024, to shareholders of record at the close of business on Jun 4.
Alberta-based integrated energy company distributed C$1 billion to its shareholders, consisting of C$700 million in dividends and C$300 million in share repurchases during the quarter under review.
Suncor reached a new milestone in oil sands production, hitting an all-time quarterly high. This is attributed to the increased working interest in Fort Hills and record fire bag production. Additionally, the company posted its highest-ever refining throughput and recorded peak refined product output.
Suncor Energy Inc. Price, Consensus and EPS Surprise
Suncor Energy Inc. price-consensus-eps-surprise-chart | Suncor Energy Inc. Quote
Segmental Performance
Upstream: Total production in this segment increased 3.3% year over year to 835,000 barrels of oil equivalent per day (boe/d) from 742,100 boe/d.
The company’s exploration and production volume (international, offshore and natural gas) slipped 24.9% to 50,300 boe/d from 67,000 boe/d in the year-ago quarter. This was due to the divestment of SU’s U.K. portfolio and the absence of production from White Rose.
Adjusted operating earnings totaled C$1.81 billion compared with C$1.82 billion in the year-ago quarter.
Operating cost per barrel decreased to C$26.85 from C$29.6 in the corresponding period of 2023. Upgrader utilization increased to 107% from 95% a year ago.
Bitumen production rose to 240,000 boe/d from 177,300 boe/d in the previous year. This increase was driven by higher overall production levels.
Oil sands production climbed to 545,000 boe/d from 497,800 boe/d a year earlier. This improvement stemmed from robust asset performance at Oil Sands Base.
Fort Hills reported an average first-quarter volume of 177,600 barrels per day (bpd), higher than the year-ago quarter’s level of 74,700 bpd.
The cash operating cost per barrel dropped to C$32.85 from C$41.4 in the prior-year period. This decrease in cost was due to the increased production volumes.
Downstream: Adjusted operating earnings from the unit increased to C$1.1 billion from the year-ago quarter’s reported figure of C$998 million. The growth in adjusted operating earnings was mainly driven by higher refinery production and a FIFO inventory valuation gain during the reviewed quarter.
Refined product sales totaled 581,000 bpd, up from the prior-year quarter’s level of 514,800 bpd. Strong refinery output and the company's effective use of its extensive domestic sales network and export channels were key factors for the results during this period.
Refinery crude throughput totaled 455,300 bpd compared with 367,700 bpd in the year-ago period. Refinery utilization was 98% compared with 79% a year ago. The increase in refinery crude throughput was due to strong utilization rates across all refineries during the quarter under review.
Financial Position
Total expenses increased 8% to C$10.3 billion from the prior-year quarter.
Cash flow from operating activities amounted to C$2.8 billion, up from the prior-year quarter’s level of C$1 billion. Suncor Energy incurred capital expenditures worth C$1.3 billion in the first quarter of 2024.
As of Mar 31, 2024, the company had cash and cash equivalents of C$2.5 billion and long-term debt of C$11.3 billion. Its total debt to total capital was 21.3%.
Guidance
SU expects production in the range of 770,000-810,000 boe/d for 2024.
Oil Sands operations yield is anticipated in the band of 430,000-460,000 bbls/d, while the same for Fort Hills is projected in the 155,000-165,000 bbls/d range. Syncrude and Exploration and Production operations yield is expected in the range of 175,000-190,000 bpd and 45,000-55,000 boe/d, respectively.
This Zacks Rank #3 (Hold) company also expects capital expenditures in the band of C$6.3-C$6.5 billion for full-year 2024. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Q1 Energy Earnings So Far
While we have discussed the company’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
Independent oil and natural gas company Magnolia Oil & Gas Corporation (MGY - Free Report) announced adjusted net income of 49 cents per share, which beat the Zacks Consensus Estimate of 44 cents. However, the bottom line deteriorated from the year-ago quarter’s level of 56 cents.
Total revenues came in at $319.4 million, which beat the Zacks Consensus Estimate of $308 million. The top line also improved 3.6% from $308.4 million recorded in the year-ago period. As of Mar 31, 2024, the company had cash and cash equivalents worth $399.3 million and long-term debt of $393.5 million, with debt to total capital of about 17.2%.
SLB (SLB - Free Report) , the largest oilfield contractor, delivered earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure, however, was above our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. The figure was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.