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Cenovus (CVE) Misses Q1 Earnings Estimates, Hikes Dividend

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Cenovus Energy Inc. (CVE - Free Report) reported first-quarter 2022 earnings per share of 62 cents, missing the Zacks Consensus Estimate of earnings of 64 cents. However, the bottom line improved from the year-ago quarter’s earnings of 8 cents per share.

Total quarterly revenues of $16,198 million beat the Zacks Consensus Estimate of $10,691 million. The top line significantly increased from the year-ago quarter’s $9,293 million.

The lower-than-expected earnings can be attributed to increased transportation and blending expenses, as well as expenses for purchased products. The positives were partially offset by higher daily oil sand production.

Cenovus Energy Inc Price, Consensus and EPS Surprise

 

Cenovus Energy Inc Price, Consensus and EPS Surprise

Cenovus Energy Inc price-consensus-eps-surprise-chart | Cenovus Energy Inc Quote

Dividend Hike

Cenovus has increased the quarterly base dividend to 10.5 Canadian cents per share, suggesting a 200% increase from 3.5 Canadian cents per share. The dividend will be paid on Jun 30, 2022, to common shareholders of record as of Jun 15, 2022.

Operational Performance

Upstream

The quarterly operating margin from the Oil Sands unit was reported at C$2,199 million, improving from C$1,141 million reported a year ago. Higher daily oil sand production primarily aided the segment.

In the March-end quarter, the company recorded daily oil sand production of 595 thousand barrels, up 7.5% year over year on contributions from its Christina Lake and Foster Creek operations.

The operating margin at the Conventional unit was C$263 million, up from C$210 million in the year-ago quarter. In the first quarter, the company recorded daily liquid production of 32.7 thousand barrels, down 11.4% year over year.

The Offshore segment generated an operating margin of C$458 million, up from C$344 million in the year-ago quarter. In the reported quarter, the company recorded daily offshore liquid production of 26.8 thousand barrels.

Downstream

From the Canadian Manufacturing unit, the company reported an operating margin of C$114 million, up from C$82 million in the year-ago quarter. The company recorded Crude Oil processed volumes at 98.1 thousand barrels per day (MBbl/D).

The operating margin from the U.S. Manufacturing unit was reported at C$423 million, up from C$91 million in the prior-year quarter. Crude oil processed volumes were 403.7 MBbl/D, signifying an improvement from 362.9 MBbl/D in the year-ago quarter.

For the Retail unit, the company reported an operating margin of C$7 million, down from C$11 million in the prior-year quarter.

Expenses

Transportation and blending expenses in the reported quarter increased to C$2,919 million from C$1,785 million a year ago. Expenses for purchased products rose to C$7,538 million from C$4,237 million in the prior-year quarter.

Capital Investment & Balance Sheet

The company made a total capital investment of C$746 million in the quarter under review.

As of Mar 31, 2022, the Canadian energy player had cash and cash equivalents of C$3,399 million. Total long-term debt was C$11,744 million. Its total debt-to-capitalization was 32.4%.

Outlook

For 2022, Cenovus projects a capital expenditure of $2.9-$3.3 billion. This marks an increase from the prior projection of $2.6-$3 billion.

Zacks Rank

The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

A Glimpse of Q1 Results of Other Energy Companies

Matador Resources Company (MTDR - Free Report) reported first-quarter 2022 adjusted earnings of $2.32 per share, beating the Zacks Consensus Estimate of $2.05 per share. The strong quarterly earnings were driven by increased oil-equivalent production volumes and higher commodity price realizations.

As of Mar 31, 2022, Matador had cash and restricted cash of $120.2 million. Long-term debt was recorded at $1,498 million, including $50 million of borrowings under its credit agreement. Debt to capitalization was 39.1%.

Range Resources Corporation (RRC - Free Report) reported first-quarter 2022 adjusted earnings of $1.18 per share, beating the Zacks Consensus Estimate of $1.15 per share. The strong quarterly earnings can be attributed to higher realizations of commodity prices.

At the first-quarter end, Range Resources had total debt of $1,829.7 million. It had a debt-to-capitalization of 53.3%. In first-quarter 2022, the company’s board of directors approved the authorization of a $500-million share repurchase program.

Halliburton Company (HAL - Free Report) reported a first-quarter 2022 adjusted net income per share of 35 cents, in line with the Zacks Consensus Estimate. The performance reflects stronger-than-expected profit from the company’s Drilling and Evaluation division.

As of Mar 31, 2022, the company had $2.2 billion in cash/cash equivalents and $8.5 billion in long-term debt, representing a debt-to-capitalization ratio of 54.8%. The Houston-based company’s cash flow generation capabilities and balance sheet strength should also ensure increased shareholder returns.

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