雅虎香港財經 Suncor Energy (SU) Up 8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Suncor Energy (SU). Shares have added about 8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Suncor Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Suncor Energy Q4 Earnings Fall Y/Y, Sales Beat Estimates
Suncor Energy reported fourth-quarter 2023 adjusted operating earnings of 93 cents per share, down from the prior-year quarter's level of $1.33. The underperformance could be primarily attributed to a 4.2% increase in expenses year over year.
Operating revenues of $10.4 billion beat the Zacks Consensus Estimate by 22.4%. The top line also increased approximately 2% on a year-over-year basis due to higher sales in the Upstream and Downstream segments.
Suncor Energy’s board of directors approved a quarterly dividend of 54.5 Canadian cents per share, on its common shares, payable on Mar 25, 2024, to shareholders of record at the close of business on Mar 4, 2024. The company repurchased shares worth approximately C$375 million during the reported quarter.
Segmental Performance
Upstream: Total production in this segment increased 5.9% year over year to 808,100 barrels of oil equivalent per day (boe/d) from 763,100 boe/d.
The company’s exploration and production volume (international, offshore and natural gas) slipped 32.4% to 50.700 boe/d from 75,000 boe/d in the year-ago quarter. This was due to the divestment of SU’s U.K. portfolio.
Adjusted operating earnings totaled C$1.6 billion compared with C$2.4 billion in the year-ago quarter.
Operating cost per barrel increased to C$30.8 from C$28.35 in the corresponding period of 2022. Upgrader utilization decreased to 83% from 93% a year ago.
Bitumen production increased to 281,400 boe/d from 170,600 boe/d in the prior-year period. Oil sands volumes reduced to 475,700 boe/d from 517,500 boe/d a year ago.
Fort Hills reported an average fourth-quarter volume of 154,100 bpd, higher than the year-ago quarter’s level of 69,500 bpd. Cash operating cost per barrel decreased to C$28.1 from C$37.1 in the prior-year period. This cost reduction can be attributed to increased production volumes and lower natural gas prices.
Downstream: Adjusted operating earnings from the unit decreased to C$8.1 billion from the year-ago quarter’s reported figure of C$9 billion. This was due to lower benchmark crack spreads.
Refined product sales totaled 575,500 bpd, up from the prior-year quarter’s level of 548,200 bpd due to higher refinery production.
Crude throughput totaled 455,900 bpd compared with 440,000 bpd in the year-ago period. Refinery utilization was 98% compared with 94% a year ago.
Financial Position
Total expenses increased 4.2% to C$10.7 billion from that recorded in the prior-year quarter.
Cash flow from operating activities amounted to C$4.3 billion, up from the prior-year quarter’s level of C$3.9 billion. Suncor Energy incurred capital expenditures worth C$1.5 billion in the fourth quarter of 2023.
As of Dec 31, 2023, the company had cash and cash equivalents of C$1.7 billion and long-term debt of C$11.1 billion. Its total debt to total capital was 20.4%.
Guidance
Suncor anticipates significant planned turnaround activities at Syncrude to begin in the first quarter of 2024 and conclude in the second quarter. The impact of this maintenance will be accounted for in the company's 2024 guidance.
SU expects production in the range of 770,000-810,000 boe/d for 2024.
Oil Sands operations yield is anticipated in the band of 430,000-460,000 bbls/d, while the same for Fort Hills is projected in the 155,000-165,000 bbls/d range. Syncrude and Exploration and Production operations yield is expected in the range of 175,000-190,000 bpd and 45,000-55,000 boe/d, respectively.
The company also expects capital expenditures in the band of C$6.3-C$6.5 billion for full-year 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Suncor Energy has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Suncor Energy has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Suncor Energy is part of the Zacks Oil and Gas - Integrated - Canadian industry. Over the past month, Cenovus Energy (CVE), a stock from the same industry, has gained 9.8%. The company reported its results for the quarter ended December 2023 more than a month ago.
Cenovus reported revenues of $9.65 billion in the last reported quarter, representing a year-over-year change of -6.9%. EPS of $0.29 for the same period compares with $0.29 a year ago.
For the current quarter, Cenovus is expected to post earnings of $0.32 per share, indicating a change of +33.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -14.4% over the last 30 days.
Cenovus has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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