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Cenovus (CVE) Q2 Earnings Lag Estimates on Higher Expenses
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Cenovus Energy Inc. (CVE - Free Report) reported second-quarter 2024 adjusted earnings per share of 39 cents, which missed the Zacks Consensus Estimate of 52 cents. However, the bottom line increased from the year-ago quarter’s figure of 33 cents.
Total quarterly revenues of $10.88 billion topped the Zacks Consensus Estimate of $9.78 billion. The top line also increased from the year-ago quarter’s level of $9.1 billion.
The weaker-than-expected quarterly earnings can be primarily attributed to a significant decline in production in the Canadian Manufacturing Unit and higher expenses, partially offset by contributions from the Oil Sands Unit.
Cenovus Energy Inc Price, Consensus and EPS Surprise
The quarterly operating margin from the Oil Sands unit totaled C$2.75 billion, up from C$2.04 billion reported a year ago.
In the June-end quarter, the company recorded daily oil sand production of 609.8 thousand barrels, up 6.7% year over year. The increase was primarily driven by higher contributions from its Foster Creek and Lloydminster Thermal operations.
The operating margin at the Conventional unit totaled C$42 million, down from C$73 million in the year-ago quarter. The company’s daily liquid production came in at 26.5 thousand barrels compared to 22.8 thousand barrels in the year-ago quarter.
The Offshore segment generated an operating margin of C$299 million, up from C$148 million in the year-ago quarter. Cenovus recorded daily offshore liquid production of 20 thousand barrels, up from 14 thousand barrels recorded a year ago.
Downstream
The operating margin from the Canadian Manufacturing unit was reported at a loss of C$255 million, significantly down from the year-ago quarter’s profit of C$116 million. It recorded Crude Oil processed volumes of 53.8 thousand barrels per day (MBbl/D).
The operating margin from the U.S. Manufacturing unit came in at C$102 million, significantly higher than the year-ago quarter’s level of C$27 million. Crude oil processed volumes totaled 568.9 MBbl/D, up from 442.5 MBbl/D in the year-ago quarter.
Expenses
Transportation and blending expenses increased to C$3.04 billion from C$2.77 billion a year ago.
Also, expenses for purchased products increased to C$815 million from C$751 million in the prior-year quarter.
Capital Investment & Balance Sheet
Cenovus made a total capital investment of C$1.15 billion in the quarter under review.
As of Jun 30, 2024, the Canada-based energy player had cash and cash equivalents of C$3.15 billion, and a long-term debt of C$7.28 billion.
Guidance
For 2024, Cenovus expects total upstream production to be in the band of 785-810 MBoe/d The midpoint of the range suggests an increase from the year-earlier figure of 778.7 MBoe/d. The company also updated its downstream throughput projection to the range of 640-670 MBbls/d, implying an increase from 599.2 MBbls/d reported in 2023.
The company anticipates capital expenditure to be in the band of $4.5-$5 billion for the year.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
VAALCO Energy is an independent energy company involved in upstream operation business with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
Matador Resources is a leading U.S.-based exploration and production firm. The company has consistently exceeded production expectations, demonstrating operational efficiency and robust growth. For 2024, the company expects its average daily oil equivalent production to be in the range of 158,500-163,500 BOE/d. The robust production outlook, combined with the favorable oil price environment, is expected to positively impact the company's bottom line.
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Cenovus (CVE) Q2 Earnings Lag Estimates on Higher Expenses
Cenovus Energy Inc. (CVE - Free Report) reported second-quarter 2024 adjusted earnings per share of 39 cents, which missed the Zacks Consensus Estimate of 52 cents. However, the bottom line increased from the year-ago quarter’s figure of 33 cents.
Total quarterly revenues of $10.88 billion topped the Zacks Consensus Estimate of $9.78 billion. The top line also increased from the year-ago quarter’s level of $9.1 billion.
The weaker-than-expected quarterly earnings can be primarily attributed to a significant decline in production in the Canadian Manufacturing Unit and higher expenses, partially offset by contributions from the Oil Sands Unit.
Cenovus Energy Inc Price, Consensus and EPS Surprise
Cenovus Energy Inc price-consensus-eps-surprise-chart | Cenovus Energy Inc Quote
Operational Performance
Upstream
The quarterly operating margin from the Oil Sands unit totaled C$2.75 billion, up from C$2.04 billion reported a year ago.
In the June-end quarter, the company recorded daily oil sand production of 609.8 thousand barrels, up 6.7% year over year. The increase was primarily driven by higher contributions from its Foster Creek and Lloydminster Thermal operations.
The operating margin at the Conventional unit totaled C$42 million, down from C$73 million in the year-ago quarter. The company’s daily liquid production came in at 26.5 thousand barrels compared to 22.8 thousand barrels in the year-ago quarter.
The Offshore segment generated an operating margin of C$299 million, up from C$148 million in the year-ago quarter. Cenovus recorded daily offshore liquid production of 20 thousand barrels, up from 14 thousand barrels recorded a year ago.
Downstream
The operating margin from the Canadian Manufacturing unit was reported at a loss of C$255 million, significantly down from the year-ago quarter’s profit of C$116 million. It recorded Crude Oil processed volumes of 53.8 thousand barrels per day (MBbl/D).
The operating margin from the U.S. Manufacturing unit came in at C$102 million, significantly higher than the year-ago quarter’s level of C$27 million. Crude oil processed volumes totaled 568.9 MBbl/D, up from 442.5 MBbl/D in the year-ago quarter.
Expenses
Transportation and blending expenses increased to C$3.04 billion from C$2.77 billion a year ago.
Also, expenses for purchased products increased to C$815 million from C$751 million in the prior-year quarter.
Capital Investment & Balance Sheet
Cenovus made a total capital investment of C$1.15 billion in the quarter under review.
As of Jun 30, 2024, the Canada-based energy player had cash and cash equivalents of C$3.15 billion, and a long-term debt of C$7.28 billion.
Guidance
For 2024, Cenovus expects total upstream production to be in the band of 785-810 MBoe/d The midpoint of the range suggests an increase from the year-earlier figure of 778.7 MBoe/d. The company also updated its downstream throughput projection to the range of 640-670 MBbls/d, implying an increase from 599.2 MBbls/d reported in 2023.
The company anticipates capital expenditure to be in the band of $4.5-$5 billion for the year.
Zacks Rank and Key Picks
Currently, CVE carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy sector are SM Energy (SM - Free Report) , VAALCO Energy (EGY - Free Report) and Matador Resources (MTDR - Free Report) . SM Energy presently sports a Zacks Rank #1 (Strong Buy), while VAALCO Energy and Matador carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
VAALCO Energy is an independent energy company involved in upstream operation business with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
Matador Resources is a leading U.S.-based exploration and production firm. The company has consistently exceeded production expectations, demonstrating operational efficiency and robust growth. For 2024, the company expects its average daily oil equivalent production to be in the range of 158,500-163,500 BOE/d. The robust production outlook, combined with the favorable oil price environment, is expected to positively impact the company's bottom line.