Yahoo Finance Cenovus (CVE) Up 0.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Cenovus Energy (CVE). Shares have added about 0.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cenovus due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cenovus Q1 Earnings Surpasses Estimates
Cenovus Energy Inc. reported first-quarter 2024 adjusted earnings per share of 46 cents, which beat the Zacks Consensus Estimate of 35 cents. The bottom line also increased from the year-ago quarter’s figure of 24 cents.
Total quarterly revenues of $9.94 billion missed the Zacks Consensus Estimate of $9.98 billion. The top line, however, increased from the year-ago quarter’s level of $9.07 billion.
Strong quarterly earnings can be primarily attributed to higher contributions from the Oil Sands unit and lower expenses.
Operational Performance
Upstream
The quarterly operating margin from the Oil Sands unit totaled C$2.24 billion, up from C$1.15 billion reported a year ago.
In the March-end quarter, the company recorded daily oil sand production of 613.3 thousand barrels, up 4.4% year over year primarily due to higher contributions from its Foster Creek, Sunrise and Lloydminster Thermal operations.
The operating margin at the Conventional unit totaled C$149 million, down from C$261 million in the year-ago quarter. The company’s daily liquid production of 27.3 thousand barrels declined 3.9% year over year.
The Offshore segment generated an operating margin of C$246 million, down from C$300 million in the year-ago quarter. CVE recorded daily offshore liquid production of 17.6 thousand barrels, down from 20.3 thousand barrels a year ago..
Downstream
The Canadian Manufacturing unit reported an operating margin of C$68 million, down from C$263 million in the year-ago quarter. It recorded Crude Oil processed volumes of 104.1 thousand barrels per day (MBbl/D).
The operating margin from the U.S. Manufacturing unit came in at C$492 million, up from the year-ago quarter’s level of C$128 million. Crude oil processed volumes totaled 551.1 MBbl/D, up from 359.2 MBbl/D in the year-ago quarter.
Expenses
Transportation and blending expenses declined to C$2.81 billion from C$3.03 billion a year ago.
Also, expenses for purchased products declined to C$771 million from C$838 million in the prior-year quarter.
Capital Investment & Balance Sheet
Cenovus made a total capital investment of C$1.04 billion in the quarter under review.
As of Mar 31, 2024, the Canada-based energy player had cash and cash equivalents of C$2.4 billion, and a long-term debt of C$7.23 billion.
Guidance
For 2024, Cenovus reiterated its estimate for total upstream production in the band of 770-810 MBoe/d, the midpoint of which suggests an increase from 778.7 MBoe/d reported in 2023.
The company provided its capital expenditure guidance of $4.5-$5 billion for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 15.23% due to these changes.
VGM Scores
Currently, Cenovus has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Cenovus has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Cenovus is part of the Zacks Oil and Gas - Integrated - Canadian industry. Over the past month, Imperial Oil (IMO), a stock from the same industry, has gained 1.7%. The company reported its results for the quarter ended March 2024 more than a month ago.
Imperial Oil reported revenues of $9.11 billion in the last reported quarter, representing a year-over-year change of +1.6%. EPS of $1.65 for the same period compares with $1.58 a year ago.
Imperial Oil is expected to post earnings of $1.45 per share for the current quarter, representing a year-over-year change of +68.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +7.1%.
Imperial Oil has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cenovus Energy Inc (CVE) : Free Stock Analysis Report
Imperial Oil Limited (IMO) : Free Stock Analysis Report
