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Canadian (CNQ) Q2 Earnings Rise Y/Y, Sales Beat Estimates
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Canadian Natural Resources Limited (CNQ - Free Report) reported second-quarter 2024 net earnings per share (EPS) of 80 Canadian cents, reflecting an increase from the prior-year quarter level of 66 Canadian cents. This outperformance can be attributed to year-over-year higher production.
The Calgary-based oil and gas exploration and production company’s total revenues of $6.6 billion increased from $5.9 billion reported in the year-ago period, driven by increased product sales. Additionally, the figure beat the Zacks Consensus Estimate of $6.2 billion.
CNQ’s board of directors announced a quarterly cash dividend on its common shares of 52.5 Canadian cents per unit. The dividend will be payable on Oct 4, to its shareholders of record at the close of the business on Sep 13.
In this quarter, the company generated approximately C$4.1 billion in cash flows from operating activities and about C$3.6 billion in adjusted funds flow.
Following its shareholders’ approval in May 2024, CNQ's common shares were subdivided on a two-for-one basis at market close on Jun 3, 2024. The company's common shares began trading split-adjusted on Jun 11.
In the second quarter of 2024, the company sold its 22.6 million common share investment in PrairieSky Royalty Ltd. for C$25.65 per share, resulting in net proceeds of C$575 million after fees and expenses. These proceeds reduced net debt and further strengthened the company’s financial position, maximizing the value of its shareholders.
In second-quarter 2024, the company returned C$1.9 billion to its shareholders. This included C$1.1 billion in dividends and C$0.8 billion from share repurchases (approximately 14.8 million shares at an average price of C$51.66 per share, on a split-adjusted basis).
As of Jul 31, 2024, the company has distributed approximately C$4.9 billion to its shareholders. This includes dividend payments totaling C$3.3 billion and the repurchase and cancellation of roughly 33.9 million common shares for a total of C$1.6 billion.
Canadian Natural Resources Limited Price, Consensus and EPS Surprise
Canadian Natural Resources reported quarterly production of 1,285,798 barrels of oil equivalent per day (BOE/D), up 7.7% from the prior-year quarter level. The figure was lower than our estimate of 1,327,890 BOE/D.
The oil and natural gas liquid (NGL) output increased to 934,066 barrels per day (Bbl/d) from 846,909 Bbl/d recorded a year ago. However, the figure was lower than our estimate of 979,320 Bbl/d. Exploration and production activities in North America, not including thermal in situ methods, had an average output of 231,592 barrels per day. This indicates a 2.4% year-over-yearincrease owing to drilling activities on CNQ's primary heavy crude oil assets.
Natural gas volumes totaled 2,110 million cubic feet per day (MMcf/d), up 1.2% from 2,085 MMcf/d recorded in the year-ago period. The figure beat our estimate of 2,091 MMcf/d. Production in North America amounted to 2,099 MMcf/d compared with 2,072 MMcf/d in the year-ago quarter.The figure beat our prediction of 2,080 MMcf/d.
The realized natural gas price decreased 37.2% to C$1.59 per thousand cubic feet from the year-ago level of C$2.53.The realized oil and NGL price increased 20.2% to C$86.64 per barrel from C$72.06 in the second quarter of 2023.
Costs & Capital Expenditure
Total expenses in the quarter were C$6.8 billion, up from C$6.1 billion recorded in the year-ago period.
Capital expenditure (CapEx) totaled C$2 billion compared with C$2.3 billion in the prior-year quarter.
Balance Sheet
As of Jun 30, 2024, Canadian Natural had cash and cash equivalents worth C$915 million and long-term debt of C$10.1 billion, with a debt to total capital of about 25.7%.
Guidance
The company projects total liquid production to range from 977 to 1,008 thousand barrels of oil equivalent per day (boe/d). This estimate incorporates a natural gas production prediction of 2,120 -2,230 MMcf/d.
Breaking down the liquid production further, the company anticipates a range of 253-265 thousand boe/d from conventional exploration and production operations, excluding thermal activities. The remaining liquid production, estimated between 724 thousand boe/d and 743 thousand boe/d, is expected to originate from thermal and oil sands mining and upgrading processes.
The company's production outlook is composed of a mix of conventional and unconventional oil and natural gas, with a significant portion derived from its thermal and oil sands assets.
For the year 2024, the company anticipates a total of C$5,420 million in CapEx. Approximately C$2,540 million of this amount is reserved for conventional exploration and production activities (excluding thermal projects), while the remaining C$2,880 million is allocated to thermal operations and oil sands mining and upgrading.
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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Canadian (CNQ) Q2 Earnings Rise Y/Y, Sales Beat Estimates
Canadian Natural Resources Limited (CNQ - Free Report) reported second-quarter 2024 net earnings per share (EPS) of 80 Canadian cents, reflecting an increase from the prior-year quarter level of 66 Canadian cents. This outperformance can be attributed to year-over-year higher production.
The Calgary-based oil and gas exploration and production company’s total revenues of $6.6 billion increased from $5.9 billion reported in the year-ago period, driven by increased product sales. Additionally, the figure beat the Zacks Consensus Estimate of $6.2 billion.
CNQ’s board of directors announced a quarterly cash dividend on its common shares of 52.5 Canadian cents per unit. The dividend will be payable on Oct 4, to its shareholders of record at the close of the business on Sep 13.
In this quarter, the company generated approximately C$4.1 billion in cash flows from operating activities and about C$3.6 billion in adjusted funds flow.
Following its shareholders’ approval in May 2024, CNQ's common shares were subdivided on a two-for-one basis at market close on Jun 3, 2024. The company's common shares began trading split-adjusted on Jun 11.
In the second quarter of 2024, the company sold its 22.6 million common share investment in PrairieSky Royalty Ltd. for C$25.65 per share, resulting in net proceeds of C$575 million after fees and expenses. These proceeds reduced net debt and further strengthened the company’s financial position, maximizing the value of its shareholders.
In second-quarter 2024, the company returned C$1.9 billion to its shareholders. This included C$1.1 billion in dividends and C$0.8 billion from share repurchases (approximately 14.8 million shares at an average price of C$51.66 per share, on a split-adjusted basis).
As of Jul 31, 2024, the company has distributed approximately C$4.9 billion to its shareholders. This includes dividend payments totaling C$3.3 billion and the repurchase and cancellation of roughly 33.9 million common shares for a total of C$1.6 billion.
Canadian Natural Resources Limited Price, Consensus and EPS Surprise
Canadian Natural Resources Limited price-consensus-eps-surprise-chart | Canadian Natural Resources Limited Quote
Production & Prices
Canadian Natural Resources reported quarterly production of 1,285,798 barrels of oil equivalent per day (BOE/D), up 7.7% from the prior-year quarter level. The figure was lower than our estimate of 1,327,890 BOE/D.
The oil and natural gas liquid (NGL) output increased to 934,066 barrels per day (Bbl/d) from 846,909 Bbl/d recorded a year ago. However, the figure was lower than our estimate of 979,320 Bbl/d. Exploration and production activities in North America, not including thermal in situ methods, had an average output of 231,592 barrels per day. This indicates a 2.4% year-over-yearincrease owing to drilling activities on CNQ's primary heavy crude oil assets.
Natural gas volumes totaled 2,110 million cubic feet per day (MMcf/d), up 1.2% from 2,085 MMcf/d recorded in the year-ago period. The figure beat our estimate of 2,091 MMcf/d. Production in North America amounted to 2,099 MMcf/d compared with 2,072 MMcf/d in the year-ago quarter.The figure beat our prediction of 2,080 MMcf/d.
The realized natural gas price decreased 37.2% to C$1.59 per thousand cubic feet from the year-ago level of C$2.53.The realized oil and NGL price increased 20.2% to C$86.64 per barrel from C$72.06 in the second quarter of 2023.
Costs & Capital Expenditure
Total expenses in the quarter were C$6.8 billion, up from C$6.1 billion recorded in the year-ago period.
Capital expenditure (CapEx) totaled C$2 billion compared with C$2.3 billion in the prior-year quarter.
Balance Sheet
As of Jun 30, 2024, Canadian Natural had cash and cash equivalents worth C$915 million and long-term debt of C$10.1 billion, with a debt to total capital of about 25.7%.
Guidance
The company projects total liquid production to range from 977 to 1,008 thousand barrels of oil equivalent per day (boe/d). This estimate incorporates a natural gas production prediction of 2,120 -2,230 MMcf/d.
Breaking down the liquid production further, the company anticipates a range of 253-265 thousand boe/d from conventional exploration and production operations, excluding thermal activities. The remaining liquid production, estimated between 724 thousand boe/d and 743 thousand boe/d, is expected to originate from thermal and oil sands mining and upgrading processes.
The company's production outlook is composed of a mix of conventional and unconventional oil and natural gas, with a significant portion derived from its thermal and oil sands assets.
For the year 2024, the company anticipates a total of C$5,420 million in CapEx. Approximately C$2,540 million of this amount is reserved for conventional exploration and production activities (excluding thermal projects), while the remaining C$2,880 million is allocated to thermal operations and oil sands mining and upgrading.
CNQ currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.