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Canadian Natural Resources (CNQ) Up 5.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Canadian Natural Resources (CNQ - Free Report) . Shares have added about 5.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Canadian Natural Resources due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Canadian Q2 Earnings & Sales Beat Estimates
Canadian Natural Resources Limited reported second-quarter 2024 net earnings per share (EPS) of 64 cents, outperforming the Zacks Consensus Estimate of 62 cents 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 dividendon 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.
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. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -7.19% due to these changes.
VGM Scores
Currently, Canadian Natural Resources has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Canadian Natural Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Canadian Natural Resources (CNQ) Up 5.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Canadian Natural Resources (CNQ - Free Report) . Shares have added about 5.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Canadian Natural Resources due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Canadian Q2 Earnings & Sales Beat Estimates
Canadian Natural Resources Limited reported second-quarter 2024 net earnings per share (EPS) of 64 cents, outperforming the Zacks Consensus Estimate of 62 cents 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 dividendon 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.
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. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -7.19% due to these changes.
VGM Scores
Currently, Canadian Natural Resources has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Canadian Natural Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.