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Suncor (SU) to Report Q2 Earnings: Here's What to Expect

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Suncor Energy Inc. (SU - Free Report) is set to release second-quarter 2021 results on Wednesday Jul 28. The current Zacks Consensus Estimate for the to-be-reported quarter’s profit is pegged at 36 cents per share while the same for revenues stands at $6.81 billion.

Let’s delve into the factors that might have impacted this Canadian energy giant’s performance in the June quarter. But it’s worth taking a look at its previous-quarter performance first.

Highlights of Q1 Earnings & Surprise History

In the last reported quarter, the Calgary, Alberta-based firm’s operating earnings per share came in at 39 cents, missing the Zacks Consensus Estimate of 44 cents. This lower-than-expected result is due to its ramped-down production from the exploration and production segment. The year-ago bottom line was a loss of 15 cents per share. This year-over-year outperformance is led by improved refined product sales and decreased operating, selling and general costs as a result of the company’s continuous cost-minimizing efforts.

Quarterly operating revenues of $6.82 billion came ahead of the Zacks Consensus Estimate of $6.3 billion. The top line also rose 17.9% from $5.78 billion in the year-ago quarter.

As far as earnings surprises are concerned, Suncor’s bottom line beat the Zacks Consensus Estimate in two of the last four quarters and missed the mark in the other two, delivering a surprise of 69.48%, on average. This is depicted in the graph below:

Suncor Energy Inc. Price and EPS Surprise

Suncor Energy  Inc. Price and EPS Surprise

Suncor Energy Inc. price-eps-surprise | Suncor Energy Inc. Quote

Factors to Consider for Q2

Suncor’s average oil sands sales volumes in the first quarter were 695.4 thousand barrels per day (MBbls/d), up 8.6% from the year-ago quarter’s output of 640 MBbls/d, a trend that most likely continued in the second quarter on ramped-up utilization rates. Evidently, the Zacks Consensus Estimate for oil sands sales volumes is pegged at 606 MBbls/d, indicating an increase of 8.3% from year-ago quarter's reported figure. This upside is expected to have supported the company’s second-quarter revenues and cash flows.

The integrated energy company anticipates spending the majority of its money in the second and the third quarter of each year as it attempts to complete all its maintenance work between April and October and leave only little for the winter months. Consequently, Suncor's increased capital expenditures are expected to have escalated its costs, hampering its earnings in the quarter under review.

What Does Our Model Say?

The proven Zacks model does not conclusively predict a beat for Suncor this earnings season. The combination of a positive  Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Suncor has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 36 cents per share each.

Zacks Rank: Suncor has a Zacks Rank #3, currently. You can see  the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

While an earnings beat looks uncertain for Suncor, here are some firms from the  energy  space that you may want to consider on the basis of our model:

Ovintiv Inc.  (OVV - Free Report) has an Earnings ESP of +14.49% and a Zacks Rank of 1, currently. The firm is scheduled to release earnings on Jul 27.

Range Resources Corporation  (RRC - Free Report) has an Earnings ESP of +3.51% and is Zacks #1 Ranked, presently. The firm is scheduled to release earnings on Jul 26.

Murphy USA Inc. (MUSA - Free Report) has an Earnings ESP of +12.58% and is Zacks #3 Ranked at present. The firm is scheduled to release earnings on Jul 28.