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CNQ Shares Barely Move Since Q3 Earnings and Sales Beat

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Canadian Natural Resources Limited (CNQ - Free Report) shares have slipped by a mere 0.1% since its third-quarter earnings announcement on Nov 3. This slight dip came despite the Canadian independent energy company posting earnings and revenues for the reported quarter that outperformed the consensus mark.

Behind the Earnings Headlines

Canadian Natural reported third-quarter 2022 adjusted earnings per share of $2.37, beating the Zacks Consensus Estimate of $2.09 and the year-ago quarter’s earnings of $1.41. This outperformance is primarily attributable to higher commodity price realizations due to surging commodity prices and increased year-over-year production.

Moreover, total revenues of approximately $8 billion beat the Zacks Consensus Estimate of $7.97 billion due to a year-over-year rise in sales volumes. The top line also improved from $6.12 billion a year ago.
During the quarter under review, Canadian Natural, which is committed to adding shareholder value, returned C$2.5 billion via dividends.

In good news for investors, CNQ’s board of directors announced a 13% increase in the quarterly cash dividend to 85 Canadian cents per common share. The dividend will be payable on Jan 5, 2023 to shareholders of record at the close of the business on Dec 16, 2022.

Production & Prices

Canadian Natural reported the quarterly production of 1,338,940 barrels of oil equivalent per day, up about 8.2% from the prior-year quarter’s level. The oil and NGL output (accounting for almost 73.5% of total volumes) rose to 983,678 barrels per day (Bbl/d) from 952,839 Bbl/d a year ago.

Crude oil and NGL production from operations in North America, including the synthetic crude oil production of 487,553 Bbl/d and the bitumen output of 243,393 Bbl/d, totaled 730,946 Bbl/d. The figure compared favorably with the year-ago quarter’s 716,239 Bbl/d.

Natural gas volumes recorded a 24.8% year-over-year rise from 1,708 million cubic feet per day (MMcf/d) to 2,132 MMcf/d in the quarter. Production in North America summed at 2,117 MMcf/d compared with 1,698 MMcf/d in the prior year.

Canadian Natural’s realized natural gas price surged 64% to C$5.51 per thousand cubic feet from the year-ago level of C$3.36. Moreover, the realized oil and NGL price jumped about 25% to C$84.91 per barrel from C$68.06 in the third quarter of 2021.

Costs & Capital Expenditure

Total expenses incurred in the quarter were C$6,692 million, higher than the C$4,902 million recorded a year ago. An increase in production expenses, along with transportation, blending and feedstock costs, primarily escalated the overall cost.

In the reported quarter, the capital expenditure totaled C$1,249 million.

Balance Sheet

As of Sep 30, Canadian Natural had C$565 million in cash and cash equivalents and long-term debt of C$11,580 million, representing debt to total capital of about 23.3%.

Guidance

Canadian Natural's 2022 capital spending forecast of approximately C$4.9 billion, excluding acquisitions, indicates an increase of approximately C$1.4 billion from the 2021 levels.

Zacks Rank & Key Picks

Canadian Natural Resources currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space that warrant a look include NexTier Oilfield Solutions , Vista Oil & Gas (VIST - Free Report) and Marathon Petroleum (MPC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Marathon Petroleum’s 2022 earnings stands at $25.70 per share, which suggests an increase of approximately 949% from the year-ago earnings of $2.45.

Marathon Petroleum beat estimates for earnings in all the trailing four quarters, the average being around 60%.

The consensus estimate for NexTier’s 2022 earnings stands at $1.41 per share, indicating an increase of about 427.9% from the year-ago loss of 43 cents.

NEX beat estimates for earnings in all the trailing four quarters, the average being around 271%.

The Zacks Consensus Estimate for Vista’s 2022 earnings is pegged at $3.11 per share, which indicates an increase of 475.9% from the year-ago earnings of 54 cents.

The consensus mark for VIST’s 2022 earnings has been revised 29.6% upward over the past 60 days.


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