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Canadian Natural (CNQ) Q1 Earnings Beat, Revenues Fall Y/Y

Canadian Natural Resources Limited CNQ reported first-quarter 2023 adjusted earnings per share of $1.25, which outpaced the Zacks Consensus Estimate of $1.20. This can be attributed to the year-over-year improvement in production.

The bottom line, however, declined from the year-ago quarter’s figure of $2.26.

Total revenues of $6.4 billion depreciated from $8.4 billion recorded in the prior-year period. The figure also missed the Zacks Consensus Estimate of $6.6 billion due to a reduction in oil and natural gas prices.

CNQ’s board of directors announced a quarterly cash dividend of 90 Canadian cents per common share. The dividend will be payable on Jul 5, 2023, to shareholders of record at the close of business on Jun 16, 2023.

Canadian Natural Resources Limited Price, Consensus and EPS Surprise

Canadian Natural Resources Limited Price, Consensus and EPS Surprise
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 reported quarterly production of 1,319,391 barrels of oil equivalent per day (BOE/D), up 3.1% from the prior-year quarter’s level. The oil and natural gas liquid (NGL) output (accounting for around 73% of total volumes) increased to 962,908 barrels per day (Bbl/d) from 945,809 Bbl/d a year ago.

Exploration and production activities in North America, not including thermal in situ methods, had an average output of 234,465 barrels per day. This indicates a 5.4% year-over-year improvement due to increased activity and strong drilling activities in the reported quarter.

Natural gas volumes totaled 2,139 MMcf/d, up 6.6% from 2,006 MMcf/d recorded in the year-ago period. Production in North America amounted to 2,127 MMcf/d compared with 1,988 MMcf/d in the comparable quarter of 2022.

The realized natural gas price decreased 5.3% to C$4.12 per thousand cubic feet from the year-ago level of C$4.35. The realized oil and NGL price reduced 37.1% to C$58.85 per barrel from C$93.54 in the first quarter of 2022.

Costs & Capital Expenditure

Total expenses in the quarter were C$6,342 million, significantly down from C$6,600 million recorded in the year-ago period.

Capital expenditure totaled C$1,394 million compared with C$1,455 million a year ago.

Balance Sheet

As of Mar 31, Canadian Natural had cash and cash equivalents worth C$92 million and long-term debt of C$11,032 million, with a debt to total capital of about 22.2%.

Guidance

The company anticipates total capital expenditures of C$5.2 billion for 2023.

It also expects total production of approximately 1,330,000-1,374,000 BOE/‍d for the entire year.

Zacks Rank and Key Picks

Currently, Canadian Natural carries a Zacks Rank #3 (Hold).

Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum EPM, sporting a Zacks Rank #1 (Strong Buy), and Archrock AROC and Ranger Energy Services RNGR, both holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Evolution Petroleum: EPM is worth approximately $219.16 million. EPM currently pays a dividend of 48 cents per share, or 7.38%, on an annual basis.

The company currently has a forward P/E ratio of 6.07. In comparison, its industry has an average forward P/E of 7.50, which means EPM is trading at a discount to the group.

Archrock: AROC is valued at around $1.55 billion. It delivered an average earnings surprise of 26.27% for the last four quarters and its current dividend yield is 6.06%.

Archrock is a provider of natural gas contract compression services and aftermarket services of compression equipment.

Ranger Energy Services: RNGR is valued at around $183.61 million. In the past year, its shares have gained 13.8%.

Ranger Energy Services currently has a forward P/E ratio of 5.30. In comparison, its industry has an average forward P/E of 11.60, which means RNGR is trading at a discount to the group.

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Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report

Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report

Archrock, Inc. (AROC) : Free Stock Analysis Report

Ranger Energy Services, Inc. (RNGR) : Free Stock Analysis Report

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