Cenovus Energy Inc. (CVE - Free Report) declined almost 4% after reporting lower-than-expected earnings for the second quarter on Jul 29. The underperformance was owing to a significant increase in transportation and blending expenses and costs for purchased products. This was partially offset by higher daily oil sand production.
The company reported second-quarter 2021 earnings per share of 9 cents, missing the Zacks Consensus Estimate of earnings of 29 cents. The bottom line, however, compared favorably with the year-ago loss of 25 cents per share.
Revenues of $8,610 million increased from the year-ago $1,568 million.
Operational Performance
Upstream
Quarterly operating margin from the Oil Sands unit was reported at C$1,411 million, improving from the year-ago C$130 million. Higher daily oil sand production primarily aided the segment.
In the June quarter, the company recorded daily oil sand production of 549.4 thousand barrels, up 47.2% year over year on contributions from its Christina Lake operations.
Operating margin at the Conventional unit was C$142 million, up from C$32 million in the year-ago quarter. In the June quarter, the company recorded daily liquids production of 38.2 thousand barrels, up 42.5% year over year.
The Offshore segment generated operating margin of C$340 million. In the June quarter, the company recorded daily offshore liquid production of 27.3 thousand barrels.
Downstream
From the Canadian Manufacturing unit, the company reported operating margin of C$189 million, up from C$6 million in the year-ago quarter. The company recorded Crude Oil processed volumes at 103.5 thousand barrels per day (MBbl/D).
Operating margin from the U.S. Manufacturing unit was reported at C$96 million, deteriorating from C$123 million in the prior-year quarter. The underperformance was owing to lower refining margin. Crude oil processed volumes were recorded at 435.5 MBbl/D, signifying an improvement from 162.3 MBbl/D in the year-ago quarter.
From the Retail unit, the company reported operating margin of C$6 million.
Expenses
Transportation and blending expenses in the reported quarter increased to C$1,796 million from C$646 million a year ago. Expenses for purchased products rose to C$5,253 million from C$741 million in the prior-year quarter.
Capital Investment & Balance Sheet
The company made total capital investment of C$534 million in the quarter under review.
As of Jun 30, 2021, the Canadian energy player had cash and cash equivalents of C$1,055 million. Total long-term debt was C$12,748 million. Its total debt to capitalization was 36.3%.
Guidance
The production guidance for 2021 has been revised upward by the company to 750,000 BoE/D-790,000 BoE/D. The company projected total capital expenditure for upstream business in the band of $1,320 million to $1,510 million. Total capital guidance has been kept unchanged by the integrated player.
Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include Whiting Petroleum Corporation , Continental Resources, Inc. and PDC Energy, Inc. . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Continental is expected to witness earnings growth of 256% in 2021.
PDC Energy is likely to see earnings growth of 111.8% in 2021.
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Cenovus Energy Inc. (CVE - Free Report) declined almost 4% after reporting lower-than-expected earnings for the second quarter on Jul 29. The underperformance was owing to a significant increase in transportation and blending expenses and costs for purchased products. This was partially offset by higher daily oil sand production.
The company reported second-quarter 2021 earnings per share of 9 cents, missing the Zacks Consensus Estimate of earnings of 29 cents. The bottom line, however, compared favorably with the year-ago loss of 25 cents per share.
Revenues of $8,610 million increased from the year-ago $1,568 million.
Operational Performance
Upstream
Quarterly operating margin from the Oil Sands unit was reported at C$1,411 million, improving from the year-ago C$130 million. Higher daily oil sand production primarily aided the segment.
In the June quarter, the company recorded daily oil sand production of 549.4 thousand barrels, up 47.2% year over year on contributions from its Christina Lake operations.
Operating margin at the Conventional unit was C$142 million, up from C$32 million in the year-ago quarter. In the June quarter, the company recorded daily liquids production of 38.2 thousand barrels, up 42.5% year over year.
The Offshore segment generated operating margin of C$340 million. In the June quarter, the company recorded daily offshore liquid production of 27.3 thousand barrels.
Downstream
From the Canadian Manufacturing unit, the company reported operating margin of C$189 million, up from C$6 million in the year-ago quarter. The company recorded Crude Oil processed volumes at 103.5 thousand barrels per day (MBbl/D).
Operating margin from the U.S. Manufacturing unit was reported at C$96 million, deteriorating from C$123 million in the prior-year quarter. The underperformance was owing to lower refining margin. Crude oil processed volumes were recorded at 435.5 MBbl/D, signifying an improvement from 162.3 MBbl/D in the year-ago quarter.
From the Retail unit, the company reported operating margin of C$6 million.
Expenses
Transportation and blending expenses in the reported quarter increased to C$1,796 million from C$646 million a year ago. Expenses for purchased products rose to C$5,253 million from C$741 million in the prior-year quarter.
Capital Investment & Balance Sheet
The company made total capital investment of C$534 million in the quarter under review.
As of Jun 30, 2021, the Canadian energy player had cash and cash equivalents of C$1,055 million. Total long-term debt was C$12,748 million. Its total debt to capitalization was 36.3%.
Guidance
The production guidance for 2021 has been revised upward by the company to 750,000 BoE/D-790,000 BoE/D. The company projected total capital expenditure for upstream business in the band of $1,320 million to $1,510 million. Total capital guidance has been kept unchanged by the integrated player.
Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include Whiting Petroleum Corporation , Continental Resources, Inc. and PDC Energy, Inc. . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Continental is expected to witness earnings growth of 256% in 2021.
PDC Energy is likely to see earnings growth of 111.8% in 2021.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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