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Cenovus (CVE) Gains 33% Even as Q3 Earnings Miss Estimates
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Cenovus Energy Inc. (CVE - Free Report) reported third-quarter 2020 loss per share of 28 cents, wider than the Zacks Consensus Estimate of a loss of 3 cents. In the prior-year quarter, the integrated energy firm reported earnings of 18 cents per share.
Revenues of $2,861 million missed the Zacks Consensus Estimate of $3,216 million. Moreover, the top line declined from the year-ago $3,839 million.
The leading energy firm’s weak quarterly results were due to lower contributions from oil sands operations, partially offset by a decline in transportation and blending expenses. Notably, a weak pricing environment of commodities owing to the coronavirus pandemic hurt the company’s bottom line.
Despite the weak results, the stock gained 33.3% since the earnings announcement on Oct 29. It seems that investors are betting on the company’s strong focus on optimizing cost structures and ability to capitalize on recovering commodity prices backed by reliable and robust operations.
Cenovus Energy Inc Price, Consensus and EPS Surprise
The company, on Nov 9, signed an accord to divest its Marten Hills oil properties for a total consideration of C$100 million – including both cash and stocks. However, the company has decided to capitalize on the future development of Clearwater formation at the oil assets and hence will retain a gross overriding royalty interest.
Operational Performance
Quarterly gross revenues from the Oil Sands unit fell to C$2,195 million from C$2,722 million in third-quarter 2019. In the September quarter, the company recorded daily oil sand production of 385,937 barrels, up 8.8% year over year.
Notably, the segment’s operating income was C$169 million, down from C$525 million a year ago.
Gross revenues at the Conventional unit were C$156 million, up from C$131 million in the year-ago quarter. In the September quarter, the company recorded daily liquids production of 25,851 barrels, down marginally 0.9% year over year.
The segment’s operating loss came in at C$70 million, wider than the loss of C$41 million in the year-ago quarter.
The Refining and Marketing segment generated gross revenues of C$1,569 million, down from C$2,420 million a year ago. Moreover, the unit’s operating loss was C$595 million against a profit of C$61 million a year ago.
Expenses
Transportation and blending expenses in the reported quarter contracted to C$1,033 million from C$1,255 million a year ago. Moreover, expenses for purchased products fell to C$1,408 million from C$1,862 million in the prior-year quarter. Operating costs in the quarter were C$481 million, down from the year-ago level of C$529 million.
Capital Expenditures & Balance Sheet
The company incurred total capital expenditure of C$152 million in the quarter under review.
As of Sep 30, 2020, the Canadian energy player had cash and cash equivalents of C$404 million. Total long-term debt was C$7,797 million. Its total debt to capitalization was 31.8%.
Zacks Rank & Key Picks
The company currently has a Zacks Rank #4 (Sell). Meanwhile, a few better-ranked players in the energy space include PDC Energy Inc. , Matador Resources Company (MTDR - Free Report) and Antero Resources Corporation (AR - Free Report) . While PDC Energy sports a Zacks Rank #1 (Strong Buy), Matador and Antero carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
PDC Energy is likely to see earnings growth of 13.3% in 2020.
Matador has seen upward estimate revisions for its 2020 bottom line in the past 30 days.
Anterohas seen upward estimate revisions for its 2020 bottom line in the past 30 days.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
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Cenovus (CVE) Gains 33% Even as Q3 Earnings Miss Estimates
Cenovus Energy Inc. (CVE - Free Report) reported third-quarter 2020 loss per share of 28 cents, wider than the Zacks Consensus Estimate of a loss of 3 cents. In the prior-year quarter, the integrated energy firm reported earnings of 18 cents per share.
Revenues of $2,861 million missed the Zacks Consensus Estimate of $3,216 million. Moreover, the top line declined from the year-ago $3,839 million.
The leading energy firm’s weak quarterly results were due to lower contributions from oil sands operations, partially offset by a decline in transportation and blending expenses. Notably, a weak pricing environment of commodities owing to the coronavirus pandemic hurt the company’s bottom line.
Despite the weak results, the stock gained 33.3% since the earnings announcement on Oct 29. It seems that investors are betting on the company’s strong focus on optimizing cost structures and ability to capitalize on recovering commodity prices backed by reliable and robust operations.
Cenovus Energy Inc Price, Consensus and EPS Surprise
Cenovus Energy Inc price-consensus-eps-surprise-chart | Cenovus Energy Inc Quote
Marten Hills Assets Sale
The company, on Nov 9, signed an accord to divest its Marten Hills oil properties for a total consideration of C$100 million – including both cash and stocks. However, the company has decided to capitalize on the future development of Clearwater formation at the oil assets and hence will retain a gross overriding royalty interest.
Operational Performance
Quarterly gross revenues from the Oil Sands unit fell to C$2,195 million from C$2,722 million in third-quarter 2019. In the September quarter, the company recorded daily oil sand production of 385,937 barrels, up 8.8% year over year.
Notably, the segment’s operating income was C$169 million, down from C$525 million a year ago.
Gross revenues at the Conventional unit were C$156 million, up from C$131 million in the year-ago quarter. In the September quarter, the company recorded daily liquids production of 25,851 barrels, down marginally 0.9% year over year.
The segment’s operating loss came in at C$70 million, wider than the loss of C$41 million in the year-ago quarter.
The Refining and Marketing segment generated gross revenues of C$1,569 million, down from C$2,420 million a year ago. Moreover, the unit’s operating loss was C$595 million against a profit of C$61 million a year ago.
Expenses
Transportation and blending expenses in the reported quarter contracted to C$1,033 million from C$1,255 million a year ago. Moreover, expenses for purchased products fell to C$1,408 million from C$1,862 million in the prior-year quarter. Operating costs in the quarter were C$481 million, down from the year-ago level of C$529 million.
Capital Expenditures & Balance Sheet
The company incurred total capital expenditure of C$152 million in the quarter under review.
As of Sep 30, 2020, the Canadian energy player had cash and cash equivalents of C$404 million. Total long-term debt was C$7,797 million. Its total debt to capitalization was 31.8%.
Zacks Rank & Key Picks
The company currently has a Zacks Rank #4 (Sell). Meanwhile, a few better-ranked players in the energy space include PDC Energy Inc. , Matador Resources Company (MTDR - Free Report) and Antero Resources Corporation (AR - Free Report) . While PDC Energy sports a Zacks Rank #1 (Strong Buy), Matador and Antero carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
PDC Energy is likely to see earnings growth of 13.3% in 2020.
Matador has seen upward estimate revisions for its 2020 bottom line in the past 30 days.
Anterohas seen upward estimate revisions for its 2020 bottom line in the past 30 days.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>