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Why Is Canadian Natural Resources (CNQ) Up 49.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Canadian Natural Resources (CNQ - Free Report) . Shares have added about 49.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Canadian Natural Resources due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Canadian Natural Q3 Earnings Beat, Revenues Top Too
Canadian Natural Resources Limited reported third-quarter 2020 adjusted earnings per share of 8 cents, beating the Zacks Consensus Estimate of 2 cents, attributable to increased production from North America, lower costs and higher natural gas price realizations. However, the bottom line fell from the year-ago profit of 79 cents per share. The year-over-year underperformance is due to lower weak crude oil and NGLs price realizations.
Total revenues of $3.38 billion surpassed the Zacks Consensus Estimate of $3.26 billion. However, the top line declined from third-quarter 2019 revenues of $4.67 billion.
During the quarter under review, the company, which is committed to adding shareholder value, returned C$502 million via dividends.
Canadian Natural declared a quarterly dividend of 42.5 Canadian cents a share, payable Jan 5, 2021 to its shareholders of record as of Dec 9, 2020.
Production & Prices
Canadian Natural reported quarterly production of 1,111,286 barrels of oil equivalent per day (BOE/d), down 5.5% from the prior-year quarter. Oil and natural gas liquids (NGLs) output (accounting for more than 79.5% of total volumes) decreased to 884,342 barrels per day (Bbl/d) from 931,546 Bbl/d a year ago. Crude oil and NGLs production from operations in North America including synthetic crude oil production of 350,633 Bbl/d and bitumen output of 287,978 Bbl/d totaled 638,611 Bbl/d, comparing favorably with the year-ago quarter’s 638,598 Bbl/d owing to a continued focus on effective and efficient operations.
Natural gas volumes recorded a 7.3% year-over-year decline from 1,469 million cubic feet per day (MMcf/d) to 1,362 MMcf/d in the quarter under review. Production in North America summed 1,340 MMcf/d compared with 1,425 MMcf/d in the prior year.
Canadian Natural’s realized natural gas price increased 40.9% to C$2.31 per thousand cubic feet from the year-ago level of C$1.67. However, realized oil and NGLs price plummeted 27.3% to C$40.14 per barrel from C$55.19 in the third quarter of 2019.
Costs & Capital Expenditure
Total expenses incurred in the quarter were C$4,087 million, lower than C$4,796 million recorded a year ago. Decline in transportation costs and production expenses along with higher foreign exchange gain reduced the overall costs. Meanwhile, Canadian Natural’s Oil Sands Mining and Upgrading operating expenses increased 19% year over year to C$23.81 per barrel.
In the reported quarter, capital expenditure came in at C$771 million.
Balance Sheet
As of Sep 30, the company had C$175 million in cash and cash equivalents, and a long-term debt of C$21,048 million, representing total debt to total capital of 39.6%.
Further, the company generated free cash flow of C$467 in the third quarter.
2020 Guidance
Canadian Natural reiterates its 2020 capex at C$2.7 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Canadian Natural Resources has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Canadian Natural Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Canadian Natural Resources (CNQ) Up 49.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Canadian Natural Resources (CNQ - Free Report) . Shares have added about 49.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Canadian Natural Resources due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Canadian Natural Q3 Earnings Beat, Revenues Top Too
Canadian Natural Resources Limited reported third-quarter 2020 adjusted earnings per share of 8 cents, beating the Zacks Consensus Estimate of 2 cents, attributable to increased production from North America, lower costs and higher natural gas price realizations. However, the bottom line fell from the year-ago profit of 79 cents per share. The year-over-year underperformance is due to lower weak crude oil and NGLs price realizations.
Total revenues of $3.38 billion surpassed the Zacks Consensus Estimate of $3.26 billion. However, the top line declined from third-quarter 2019 revenues of $4.67 billion.
During the quarter under review, the company, which is committed to adding shareholder value, returned C$502 million via dividends.
Canadian Natural declared a quarterly dividend of 42.5 Canadian cents a share, payable Jan 5, 2021 to its shareholders of record as of Dec 9, 2020.
Production & Prices
Canadian Natural reported quarterly production of 1,111,286 barrels of oil equivalent per day (BOE/d), down 5.5% from the prior-year quarter. Oil and natural gas liquids (NGLs) output (accounting for more than 79.5% of total volumes) decreased to 884,342 barrels per day (Bbl/d) from 931,546 Bbl/d a year ago. Crude oil and NGLs production from operations in North America including synthetic crude oil production of 350,633 Bbl/d and bitumen output of 287,978 Bbl/d totaled 638,611 Bbl/d, comparing favorably with the year-ago quarter’s 638,598 Bbl/d owing to a continued focus on effective and efficient operations.
Natural gas volumes recorded a 7.3% year-over-year decline from 1,469 million cubic feet per day (MMcf/d) to 1,362 MMcf/d in the quarter under review. Production in North America summed 1,340 MMcf/d compared with 1,425 MMcf/d in the prior year.
Canadian Natural’s realized natural gas price increased 40.9% to C$2.31 per thousand cubic feet from the year-ago level of C$1.67. However, realized oil and NGLs price plummeted 27.3% to C$40.14 per barrel from C$55.19 in the third quarter of 2019.
Costs & Capital Expenditure
Total expenses incurred in the quarter were C$4,087 million, lower than C$4,796 million recorded a year ago. Decline in transportation costs and production expenses along with higher foreign exchange gain reduced the overall costs. Meanwhile, Canadian Natural’s Oil Sands Mining and Upgrading operating expenses increased 19% year over year to C$23.81 per barrel.
In the reported quarter, capital expenditure came in at C$771 million.
Balance Sheet
As of Sep 30, the company had C$175 million in cash and cash equivalents, and a long-term debt of C$21,048 million, representing total debt to total capital of 39.6%.
Further, the company generated free cash flow of C$467 in the third quarter.
2020 Guidance
Canadian Natural reiterates its 2020 capex at C$2.7 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Canadian Natural Resources has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Canadian Natural Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.