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Canadian Natural (CNQ) Stock Up 3% Since Q1 Earnings Beat

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·5 min read
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Shares of Canadian Natural Resources Limited CNQ have risen 3.1% since the first-quarter 2022 earnings announcement on May 5.

This upward stock movement can be attributed to Canadian Natural’s earnings and revenues beating the Zacks Consensus Estimate.

Behind the Earnings Headlines

Canadian Natural reported first-quarter 2022 adjusted earnings per share of $2.26, beating the Zacks Consensus Estimate of $1.94 and the year-ago quarter’s earnings of 81 cents. This outperformance is attributable to higher commodity price realizations due to surging commodity prices and increased year-over-year production.

Moreover, total revenues of $8.43 billion beat the Zacks Consensus Estimate of $7.12 billion due to a year-over-year rise in sales volumes. The top line also improved from $5.22 billion a year ago.

During the quarter under review, Canadian Natural, which is committed to adding shareholder value, returned C$700 million (C$ 0.7 billion) via dividends.

CNQ’s Board of Directors announced a quarterly cash dividend on its common shares of 75 Canadian cents per common share. The dividend will be payable on Jul 5, 2022 to shareholders of record at the close of the business on Jun 17, 2022.

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 the quarterly production of 1,280,180 barrels of oil equivalent per day, up about 2.8% from the prior-year quarter’s level. The oil and NGL output (accounting for almost 74% of total volumes) declined to 945,809 barrels per day (Bbl/d) from 979,352 Bbl/d a year ago.

The crude oil and NGL production from operations in North America, including the synthetic crude oil production of 429,826 Bbl/d and the bitumen output of 261,743 Bbl/d, totaled 691,569 Bbl/d, comparing unfavorably with the year-ago quarter’s 736,333 Bbl/d.

Natural gas volumes recorded a 25.5% year-over-year rise from 1,598 million cubic feet per day (MMcf/d) to 2,006 MMcf/d in the quarter. Production in North America summed at 1,988 MMcf/d compared with 1,585 MMcf/d in the prior year.

Canadian Natural’s realized natural gas price surged 57% to C$4.35 per thousand cubic feet from the year-ago level of C$2.77. Moreover, the realized oil and NGL price jumped 77.6% to C$93.54 per barrel from C$52.68 in the first quarter of 2021.

Costs & Capital Expenditure

Total expenses incurred in the quarter were C$6,600 million, higher than the C$4,913 million recorded a year ago. An increase in production expenses, along with transportation, blending and feedstock costs, and an increase in share-based compensations escalated the overall cost. CNQ’s Oil Sands Mining and Upgrading operating expenses increased 24% year over year to C$24.60 per barrel, primarily as a result of lower production volumes at Scotford together with higher energy, turnaround and maintenance-related costs.

In the reported quarter, the capital expenditure totaled C$1,455 million.

Balance Sheet

As of Mar 31, Canadian Natural had C$125 million of cash and cash equivalents and long-term debt of C$11,171 million, representing debt to total capital of about 22.5%.

Guidance

Canadian Natural's 2022 capital budget remains on track with the targeted base capital of about $3.6 billion that will deliver the earlier targeted production of approximately 1,270,000 BOE/d to 1,320,000 BOE/d.

For 2022, the company maintained the annual crude oil and NGL guidance in the 940,000 Bbl/d-982,000 Bbl/d range and the same for natural gas production, which is targeted to average between 1,980 MMcf/d and 2,030 MMcf/d.

Zacks Rank & Other Key Picks

Canadian Natural Resources currently sports a Zacks Rank #1 (Strong Buy). Some other similar-ranked players from the energy space are Enerplus ERF, Marathon Oil MRO and Cenovus Energy CVE. You can see the complete list of today’s Zacks #1 Rank stocks here.

Enerplus stock has gone up 125.9% in a year. The Zacks Consensus estimate for Enerplus’ 2022 earnings has been revised 22.7% upward over the past 60 days.

The Zacks Consensus Estimate for ERF’s 2022 earnings is projected at $3.35 per share, up about 245.4% from the projected year-ago earnings of 97 cents.

The Zacks Consensus Estimate for Marathon Oil’s 2022 earnings has been revised almost 53% upward over the past 60 days.

Marathon Oil beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 23%. MRO shares have surged around 149.2% in a year.

Cenovus Energy is valued at around $43.7 billion. The Zacks Consensus Estimate for Cenovus Energy’s 2022 earnings has been revised 10.3% upward over the past 60 days.

The Zacks Consensus Estimate for CVE’s 2022 earnings is projected at $2.68 per share, up about 230.9% from the projected year-ago earnings of 81 cents.


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