A month has gone by since the last earnings report for Canadian Natural Resources Limited (CNQ - Free Report) . Shares have lost about 2.4% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is CNQ due for a breakout? 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 catalysts.
Third-Quarter 2016 Results
Canadian Natural Resources reported third-quarter loss of $0.22, which compared unfavorably with the year-earlier profit of $0.14. Lower production and reduced oil and gas price realizations led to the underperformance.
This independent explorer and producer’s quarterly revenues of C$2,335 million were substantially lower than the year-ago figure of C$3,114 million.
Canadian Natural’s third-quarter cash flow from operations – a key metric to gauge its capability to fund new projects and drilling – was C$1,021 million. The reported figure came in significantly below the third-quarter 2015 level of C$1,533 million.
Canadian Natural’s quarterly production of 735,212 barrels of oil equivalent per day (BOE/d) was down 13% from the prior-year quarter level.
Natural gas production remained essentially flat at 1,645 million cubic feet per day (MMcf/d). However, oil and natural gas liquids (NGLs) production came in at 460,986 barrels per day (Bbl/d), well below the prior-year quarter figure of 573,135 Bbl/d.
As reported, average realized liquid price (before hedging) was C$39.66 per barrel during the third quarter, down 5% from the corresponding quarter last year. Moreover, average realized natural gas price (excluding hedging) for the three months ended Sep 30, 2016 was C$2.44 per thousand cubic feet (Mcf) as against the year-ago level of C$3.22 per Mcf.
Total expenses decreased 9% from C$3,212 million in the year-earlier quarter to C$2,924 million.
Capital Expenditure & Balance Sheet
As of Sep 30, 2016, the company had C$19 million in cash and cash equivalents and long-term debt (including current portion) of C$17,292 million, representing a debt-to-capitalization ratio of approximately 40.3%.
The company, which is Canada’s second-largest natural gas producer, anticipates capital expenditure to be approximately $4.4 billion in 2016. Canadian Natural expects fourth-quarter liquid production of 575,000–599,000 Bbl/d and natural gas production in the 1,690–1,720 MMcf/d range.
Canadian Natural has declared a quarterly cash dividend of C$0.25 on its common shares. The dividend is payable Jan 1, 2017 to shareholders on record at the close of business on Dec 9, 2016.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There have been two revisions higher for the current quarter compared to two lower.
At this time, CNQ has a strong Growth Score of A and a grade with the same score on the momentum front. 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.
Based on our scores, the stock is equally suitable for growth and momentum investors while value investors may want to look elsewhere.
CNQ has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.