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Is a Beat in Store for Canadian Natural (CNQ) in Q2 Earnings?
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Canadian Natural Resources Limited (CNQ - Free Report) is set to release second-quarter results on Aug 1. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a profit of 55 cents per share on revenues of $6.2 billion.
Let’s delve into the factors that might have influenced this independent energy company’s performance in the June quarter. But it’s worth taking a look at CNQ’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, this Calgary, Alberta, Canada-based upstream operator missed the consensus mark due to lower commodity prices and higher expenses. Canadian Natural reported adjusted earnings per share of 51 cents, lagging the Zacks Consensus Estimate by a penny. However, revenues of $6.1 billion beat the consensus mark by 1.8%, buoyed by strong production.
CNQ topped the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. The company has a trailing four-quarter earnings surprise of 5.5%, on average. This is depicted in the graph below:
Canadian Natural Resources Limited Price and EPS Surprise
The Zacks Consensus Estimate for the second-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 27.9% improvement year over year. The Zacks Consensus Estimate for revenues suggests a 5.5% increase from the year-ago reported number.
Factors to Consider
The strengthening of oil prices is likely to have significantly benefited CNQ’s second-quarter revenues and cash flows. Increased crude realizations enhance the company's revenue and profitability, as evident in its forecasted mid-single-digit revenue growth for the quarter. With oil prices stabilizing at higher levels, CNQ is expected to capitalize on improved pricing, contributing to stronger financial performance. In particular, our estimate for North America Light Crude Oil & NGL price is pegged at C$71.14 per barrel, indicating a 10% improvement from C$102.56 reported in the year-ago quarter.
The company is also expected to have reaped the reward of higher production during the quarter. According to our model, Canadian Natural is likely to have churned out an output of 1,327,890 barrels of oil equivalent per day, up about 11.2% from a year ago. This momentum could be attributed to CNQ’s broad portfolio of low-risk exploration and development projects with strong international exposure.
Finally, the recent startup of the Trans Mountain pipeline expansion is likely to have had a positive impact on Canadian Natural. This project enhances the company’s ability to transport crude oil efficiently, reducing bottlenecks and transportation costs. Improved pipeline infrastructure is expected to have supported higher export volumes, better pricing and increased profitability, contributing to CNQ’s second-quarter financial outlook.
What Our Model Unveils
Our proven model predicts an earnings beat for Canadian Natural this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other firms from the space that you may want to consider on the basis of our model:
TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 1.
Over the past 90 days, the Zacks Consensus Estimate for TC Energy’s 2024 earnings has moved up 4.5%. Valued at around $42 billion, TRP has gained 16.8% in a year.
MPLX LP (MPLX - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 6.
MPLX’s expected EPS growth rate for three to five years is currently 5%, which compares favorably with the industry's growth rate of 4.5%. Valued at around $43.8 billion, MPLX has gained 21.1% in a year.
Image: Bigstock
Is a Beat in Store for Canadian Natural (CNQ) in Q2 Earnings?
Canadian Natural Resources Limited (CNQ - Free Report) is set to release second-quarter results on Aug 1. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a profit of 55 cents per share on revenues of $6.2 billion.
Let’s delve into the factors that might have influenced this independent energy company’s performance in the June quarter. But it’s worth taking a look at CNQ’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, this Calgary, Alberta, Canada-based upstream operator missed the consensus mark due to lower commodity prices and higher expenses. Canadian Natural reported adjusted earnings per share of 51 cents, lagging the Zacks Consensus Estimate by a penny. However, revenues of $6.1 billion beat the consensus mark by 1.8%, buoyed by strong production.
CNQ topped the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. The company has a trailing four-quarter earnings surprise of 5.5%, on average. This is depicted in the graph below:
Canadian Natural Resources Limited Price and EPS Surprise
Canadian Natural Resources Limited price-eps-surprise | Canadian Natural Resources Limited Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 27.9% improvement year over year. The Zacks Consensus Estimate for revenues suggests a 5.5% increase from the year-ago reported number.
Factors to Consider
The strengthening of oil prices is likely to have significantly benefited CNQ’s second-quarter revenues and cash flows. Increased crude realizations enhance the company's revenue and profitability, as evident in its forecasted mid-single-digit revenue growth for the quarter. With oil prices stabilizing at higher levels, CNQ is expected to capitalize on improved pricing, contributing to stronger financial performance. In particular, our estimate for North America Light Crude Oil & NGL price is pegged at C$71.14 per barrel, indicating a 10% improvement from C$102.56 reported in the year-ago quarter.
The company is also expected to have reaped the reward of higher production during the quarter. According to our model, Canadian Natural is likely to have churned out an output of 1,327,890 barrels of oil equivalent per day, up about 11.2% from a year ago. This momentum could be attributed to CNQ’s broad portfolio of low-risk exploration and development projects with strong international exposure.
Finally, the recent startup of the Trans Mountain pipeline expansion is likely to have had a positive impact on Canadian Natural. This project enhances the company’s ability to transport crude oil efficiently, reducing bottlenecks and transportation costs. Improved pipeline infrastructure is expected to have supported higher export volumes, better pricing and increased profitability, contributing to CNQ’s second-quarter financial outlook.
What Our Model Unveils
Our proven model predicts an earnings beat for Canadian Natural this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CNQ has an Earnings ESP of +9.84% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Here are some other firms from the space that you may want to consider on the basis of our model:
TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 1.
Over the past 90 days, the Zacks Consensus Estimate for TC Energy’s 2024 earnings has moved up 4.5%. Valued at around $42 billion, TRP has gained 16.8% in a year.
MPLX LP (MPLX - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 6.
MPLX’s expected EPS growth rate for three to five years is currently 5%, which compares favorably with the industry's growth rate of 4.5%. Valued at around $43.8 billion, MPLX has gained 21.1% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.