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Suncor's (SU) Q4 Earnings Preview: Key Things to Consider
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Suncor Energy (SU - Free Report) is set to release fourth-quarter results on Feb 14. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.26 per share on revenues of $9.7 billion.
Let’s delve into the factors that might have influenced the Canadian energy giant’s performance in the December quarter. But it’s worth taking a look at SU’s previous-quarter performance first.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, this Calgary, Alberta-based operator beat the consensus mark significantly on higher crude oil and refined product realizations, reflecting an improved business environment in the current quarter and higher upstream production. SU had reported earnings per share of $1.44, 4 cents above the Zacks Consensus Estimate. Revenues of $11.5 billion generated by the firm also came in above the Zacks Consensus Estimate of $9.7 billion.
SU beat the Zacks Consensus Estimate in three of the last four quarters, which resulted in an earnings surprise of 8.5%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the fourth-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 77.5% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 9.1% increase from the year-ago period.
Factors to Consider
Suncor Energy is expected to have benefited from the strength in oil price. In the July-to-September period, the company’s realized crude price was $105.16 per barrel compared with the year-ago level of $73.78. The uptick is most likely to have continued in the fourth quarter, with commodity prices remaining strong on the back of geopolitical tensions and tight fundamentals. This price boost is likely to have buoyed the revenues and cash flows of SU.
The company is also expected to have reaped the reward of higher refined products’ sales during the quarter. In the previous three-month period, Suncor reported fuel sales of 577,300 barrels per day (bpd), up from the year-ago period’s 551,500 bpd. The momentum is likely to have continued in the to-be-reported quarter, with post-pandemic demand recovery driving margins higher.
On a somewhat bearish note, the increase in SU’s costs might have dented the company’s to-be-reported bottom line. The company’s third-quarter total operating expenses totaled C$15.5 billion, up from the C$8.9 billion incurred in the year-ago period. The upward cost trajectory is likely to have continued in the fourth quarter due to the prevailing inflationary environment.
What Does Our Model Say?
The proven Zacks model does not conclusively show that SU is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -0.79.
Zacks Rank: Suncor currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Suncor, here are some firms from the energy space that you may want to consider on the basis of our model:
Sunoco LP (SUN - Free Report) has an Earnings ESP of +1.95% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 15.
Sunoco beat the Zacks Consensus Estimate for earnings in two of the last four quarters. It has a trailing four-quarter earnings surprise of 28.8%, on average. Valued at around $4.7 billion, SUN has gained 6.2% in a year.
Antero Midstream Corporation (AM - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 15.
For 2023, Antero Midstream has a projected earnings growth rate of 5.9%. Valued at around $5.1 billion, AM has gained 5.8% in a year.
Cheniere Energy (LNG - Free Report) has an Earnings ESP of +18.82% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 23.
For 2023, LNG has a projected earnings growth rate of 539.1%. Valued at around $37 billion, NOV has gained 27.3% in a year.
Image: Bigstock
Suncor's (SU) Q4 Earnings Preview: Key Things to Consider
Suncor Energy (SU - Free Report) is set to release fourth-quarter results on Feb 14. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.26 per share on revenues of $9.7 billion.
Let’s delve into the factors that might have influenced the Canadian energy giant’s performance in the December quarter. But it’s worth taking a look at SU’s previous-quarter performance first.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, this Calgary, Alberta-based operator beat the consensus mark significantly on higher crude oil and refined product realizations, reflecting an improved business environment in the current quarter and higher upstream production. SU had reported earnings per share of $1.44, 4 cents above the Zacks Consensus Estimate. Revenues of $11.5 billion generated by the firm also came in above the Zacks Consensus Estimate of $9.7 billion.
SU beat the Zacks Consensus Estimate in three of the last four quarters, which resulted in an earnings surprise of 8.5%, on average. This is depicted in the graph below:
Suncor Energy Inc. Price and EPS Surprise
Suncor Energy Inc. price-eps-surprise | Suncor Energy Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 77.5% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 9.1% increase from the year-ago period.
Factors to Consider
Suncor Energy is expected to have benefited from the strength in oil price. In the July-to-September period, the company’s realized crude price was $105.16 per barrel compared with the year-ago level of $73.78. The uptick is most likely to have continued in the fourth quarter, with commodity prices remaining strong on the back of geopolitical tensions and tight fundamentals. This price boost is likely to have buoyed the revenues and cash flows of SU.
The company is also expected to have reaped the reward of higher refined products’ sales during the quarter. In the previous three-month period, Suncor reported fuel sales of 577,300 barrels per day (bpd), up from the year-ago period’s 551,500 bpd. The momentum is likely to have continued in the to-be-reported quarter, with post-pandemic demand recovery driving margins higher.
On a somewhat bearish note, the increase in SU’s costs might have dented the company’s to-be-reported bottom line. The company’s third-quarter total operating expenses totaled C$15.5 billion, up from the C$8.9 billion incurred in the year-ago period. The upward cost trajectory is likely to have continued in the fourth quarter due to the prevailing inflationary environment.
What Does Our Model Say?
The proven Zacks model does not conclusively show that SU is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -0.79.
Zacks Rank: Suncor currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Suncor, here are some firms from the energy space that you may want to consider on the basis of our model:
Sunoco LP (SUN - Free Report) has an Earnings ESP of +1.95% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 15.
Sunoco beat the Zacks Consensus Estimate for earnings in two of the last four quarters. It has a trailing four-quarter earnings surprise of 28.8%, on average. Valued at around $4.7 billion, SUN has gained 6.2% in a year.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Antero Midstream Corporation (AM - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 15.
For 2023, Antero Midstream has a projected earnings growth rate of 5.9%. Valued at around $5.1 billion, AM has gained 5.8% in a year.
Cheniere Energy (LNG - Free Report) has an Earnings ESP of +18.82% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 23.
For 2023, LNG has a projected earnings growth rate of 539.1%. Valued at around $37 billion, NOV has gained 27.3% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.