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Canadian Natural (CNQ) to Report Q3 Earnings: What to Expect

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Canadian Natural Resources Limited (CNQ - Free Report) is set to release third-quarter 2021 results on Nov 4, before the market opens. The current Zacks Consensus Estimate for the to-be-reported quarter’s profit is $1.20 per share and for revenues is $6.30 billion.

Let’s delve into the factors that might impact the independent oil and natural gas producer’s results in the September quarter. But it’s worth taking a look at Canadian Natural’s previous-quarter performance first.

Highlights of Q2 Earnings & Surprise History

In the last reported quarter, the Calgary-based upstream player reported adjusted earnings per share of $1.01, beating the Zacks Consensus Estimate of 77 cents. The bottom line also reversed the year-ago loss of 47 cents per share. This outperformance is attributable to increased natural gas output from North America and higher commodity price realizations.

Total revenues of $5.31 billion surpassed the Zacks Consensus Estimate of $5.26 billion. Moreover, the top line improved from $2.07 billion sales a year ago.

Canadian Natural’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average being 138.02%. This is depicted in the graph below:

Factors to Consider

In the second quarter of 2021, the company’s realized natural gas price had surged 56.2% to C$3.17 per thousand cubic feet from the year-ago level of C$2.03. Moreover, realized oil and NGLs price had jumped 222.6% to C$61.2 per barrel from C$18.97 in the second quarter of 2020. Both uptrends might have continued in the third quarter as well owing to the sharp rebound in commodity prices that revisited the multi-year highs following the ramped-up vaccination and the ongoing macroeconomic recovery. This price boost is likely to have buoyed the third-quarter revenues and cash flows of the energy player.

On the flip side, the company is likely to have suffered a decline in International E&P oil production. Canadian Natural reported crude oil production of 32,697 barrels per day in the second quarter, down 26% from the prior-year quarter’s level. This downside is expected to have continued in the third quarter due to natural field declines, planned maintenance activities and last year’s permanent termination of production from the Banff and Kyle fields. This, in turn, might affect Canadian Natural Resources’ results in the September quarter.

What Does Our Model Say?

The proven Zacks model does not conclusively predict a beat for Canadian Natural 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: Canadian Natural has an Earnings ESP of -4.01%.

Zacks Rank: Canadian Natural currently carries a Zacks Rank #3, which increases the predictive power of ESP.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

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

Whiting Petroleum Corporation has an Earnings ESP of +5.63% and a Zacks Rank of 1, currently. The firm is scheduled to release earnings on Nov 4.

Targa Resources Corp. (TRGP - Free Report) has an Earnings ESP of +4.00% and is Zacks #1 Ranked at present. The firm is scheduled to release earnings on Nov 4.

TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +2.53% and is presently Zacks #3 Ranked. The firm is scheduled to release earnings on Nov 5.


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