It has been about a month since the last earnings report for Cenovus Energy (CVE Quick QuoteCVE - Free Report) . Shares have added about 5.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Cenovus due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Cenovus Q4 Earnings & Revenues Beat Estimates

Cenovus reported fourth-quarter 2021 earnings per share of 43 cents, beating the Zacks Consensus Estimate of earnings of 41 cents. The bottom line turned around from the year-ago loss of 35 cents per share.

Total quarterly revenues of $10,889 million surpassed the Zacks Consensus Estimate of $9,369 million. The top line also increased significantly from the year-ago quarter’s $2,739 million.

The strong quarterly results were driven by higher daily oil sand production, and increased contributions from Christina Lake and Foster Creek operations.

Operational Performance

Upstream

The quarterly operating margin from the Oil Sands unit was reported at C$1,890 million, improving from the year-ago C$612 million. Higher daily oil sand production primarily aided the segment.

In the December-end quarter, the company recorded daily oil sand production of 624.9 thousand barrels, up 64.1% year over year on contributions from its Christina Lake and Foster Creek operations.

The operating margin at the Conventional unit was C$260 million, up from C$82 million in the year-ago quarter. In the December-end quarter, the company recorded daily liquid production of 29.7 thousand barrels, up 20.7% year over year.

The Offshore segment generated an operating margin of C$408 million. In the December-end quarter, the company recorded daily offshore liquid production of 23.7 thousand barrels.

Downstream

From the Canadian Manufacturing unit, the company reported an operating margin of C$131 million, up from C$16 million in the year-ago quarter. The company recorded Crude Oil processed volumes at 108.3 thousand barrels per day (MBbl/D).

The operating loss from the U.S. Manufacturing unit was reported at C$97 million, wider than a loss of C$85 million in the prior-year quarter. Crude oil processed volumes were recorded at 361.6 MBbl/D, signifying an improvement from 169 MBbl/D in the year-ago quarter.

For the Retail unit, the company reported an operating margin of C$8 million.

Expenses

Transportation and blending expenses in the reported quarter increased to C$2,379 million from C$1,137 million a year ago. Expenses for purchased products rose to C$7,197 million from C$1,268 million in the prior-year quarter.

Capital Investment & Balance Sheet

The company made a total capital investment of C$835 million in the quarter under review.

As of Dec 31, 2021, the Canadian energy player had cash and cash equivalents of C$2,873 million. Total long-term debt was C$12,385 million. Its total debt to capitalization was 34.6%.

Reserves

Cenovus Energy reported 2021 year-end proved reserves of 6.1 billion Boe, suggesting a year-over-year increase of 21%. Based on working interest production, the estimated proved reserves life index was 21 years.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months.

The consensus estimate has shifted 7.95% due to these changes.

VGM Scores

Currently, Cenovus has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Cenovus has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.