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Canadian Natural (CNQ) Stock Up 2.1% Since Q4 Earnings Beat

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Shares of Canadian Natural Resources Limited (CNQ - Free Report) have risen 2.1% since the fourth-quarter 2021 earnings announcement on Mar 3.

This upward stock movement can be attributed to Canadian Natural’s earnings and revenues beating the Zacks Consensus Estimate and an increase in the dividend.

Behind the Earnings Headlines

Canadian Natural reported fourth-quarter 2021 adjusted earnings per share of $1.76, beating the Zacks Consensus Estimate of $1.67 and the year-ago quarter’s earnings of 3 cents. This outperformance is attributable to expanded oil and natural gas production and higher commodity price realizations.

Moreover, total revenues of $7.35 billion beat the Zacks Consensus Estimate of $7.03 billion due to a sequential rise in sales volumes. The top line also improved from $3.85 billion figure a year ago.

During the quarter under review, Canadian Natural, which is committed to adding shareholder value, returned C$552 million via dividends.

In good news for investors, CNQ’s board of directors declared a 28% hike in its quarterly dividend, increasing the amount to 75 Canadian cents a share, payable on Apr 5, 2022 to its shareholders of record on Mar 18.

Production & Prices

Canadian Natural reported the quarterly production of 1,313,900 barrels of oil equivalent per day, up about 6.4% from the prior-year quarter’s level. Oil and NGL output (accounting for almost 77% of the total volumes) rose to 1,004,425 barrels per day (Bbl/d) from 952,404 Bbl/d a year ago.

Crude oil and NGL production from operations in North America, including the synthetic crude oil production of 493,406 Bbl/d and the bitumen output of 263,110 Bbl/d, totaled 756,516 Bbl/d, comparing favorably with the year-ago quarter’s 683,268 Bbl/d.

Natural gas volumes recorded a 13% year-over-year rise from 1,644 million cubic feet per day (MMcf/d) to 1,857 MMcf/d in the quarter. Production in North America summed 1,841 MMcf/d compared with 1,623 MMcf/d in the prior year.
Canadian Natural’s realized natural gas price surged 78.8% to C$4.67 per thousand cubic feet from the year-ago level of C$2.62. Moreover, the realized oil and NGL price jumped 70% to C$72.81 per barrel from C$40.56 in the fourth quarter of 2020.

Costs & Capital Expenditure

Total expenses incurred in the quarter were C$5,803 million, higher than C$4,259 million recorded a year ago. An increase in production expenses, along with transportation, blending and feedstock costs, escalated the overall costs. CNQ’s Oil Sands Mining and Upgrading operating expenses decreased 3% year over year to C$19.55 per barrel.

In the reported quarter, capital expenditure (including net acquisition costs) totaled C$1,804 million.

Balance Sheet

As of Dec 31, Canadian Natural had C$744 million of cash and cash equivalents and long-term debt of C$13,694 million, representing debt to total capital of about 27%.

Guidance

For 2022, the company targets its base capital budget at about $3,645 million. Production for 2022 is estimated between 1,270,000 BOE/d and 1,320,000 BOE/d. For 2022, annual crude oil and NGL output are targeted to average between 940,000 Bbl/d and 982,000 Bbl/d, while the same for natural gas production is targeted to average between 1,980 MMcf/d and 2,030 MMcf/d.

For 2022, Canadian Natural aims to allocate 50% of free cash flow to the balance sheet, less any strategic growth capital/acquisitions, and 50% of free cash flow to share buybacks.

Zacks Rank & Other Key Picks

Canadian Natural Resources currently carries a Zacks Rank #2 (Buy). Some other top-ranked players from the energy space are ConocoPhillips (COP - Free Report) , Marathon Oil (MRO - Free Report) and Cenovus Energy (CVE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ConocoPhillips is valued at around $127 billion. The consensus estimate for ConocoPhillips’ 2022 earnings has been revised 7.4% upward over the past 30 days.

COP beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 12.6%. ConocoPhillips has rallied around 82.9% in a year.

Marathon Oil has a projected earnings growth rate of 93.6% this year. The Zacks Consensus Estimate for Marathon Oil’s 2022 earnings has been revised 15.6% upward over the past 30 days.

Marathon Oil beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 37.4%. MRO shares have surged around 105.1% in a year.

Cenovus Energy is valued at around $32 billion. The Zacks Consensus Estimate for Cenovus Energy’s 2022 earnings has been revised 18.9% upward over the past 30 days.

Cenovus Energy, headquartered in Alberta, delivered a 4.9% beat in the fourth quarter of 2021. CVE shares have surged around 90.4% in a year.

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