Yahoo Finance Cenovus (CVE) Shares Dip 6% Since Q4 Earnings Miss Estimates
Cenovus Energy Inc. CVE shares have declined 6% since reporting fourth-quarter 2022 earnings on Feb 16, before the opening bell. The upward price movement can be attributed to the company’s lower-than-expected quarterly earnings.
Q4 Results
Cenovus reported fourth-quarter earnings per share of 29 cents, missing the Zacks Consensus Estimate of earnings of 48 cents. However, the bottom line improved from the year-ago quarter’s earnings of 43 cents per share.
Total quarterly revenues of $14,063 million surpassed the Zacks Consensus Estimate of $9,767 million. The top line also increased from the year-ago quarter’s $13,726 million.
Lower-than-expected quarterly earnings can be attributed to lower contributions from the Conventional and Offshore units. The negatives were partially offset by higher contributions from the downstream segment.
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 was C$1,639 million, declining from C$1,890 million reported a year ago.
In the December-end quarter, the company recorded daily oil sand production of 609.3 thousand barrels, down 2.5% year over year due to lower contribution from its Foster Creek and Christina Lake operations.
The operating margin at the Conventional unit was C$248 million, down from C$260 million in the year-ago quarter. In the fourth quarter, the company recorded daily liquid production of 32.9 thousand barrels, up 10.8% year over year.
The Offshore segment generated an operating margin of C$337 million, down from C$408 million in the year-ago quarter. In the reported quarter, the company recorded daily offshore liquid production of 22.7 thousand barrels.
Downstream
From the Canadian Manufacturing unit, the company reported an operating margin of C$278 million, up from C$139 million in the year-ago quarter. The company recorded Crude Oil processed volumes of 94.3 thousand barrels per day (MBbl/D).
The operating margin from the U.S. Manufacturing unit was C$280 million, turning around from the year-ago quarter’s loss of C$97 million in the prior-year quarter. Crude oil processed volumes were 379.2 MBbl/D, signifying an improvement from 361.6 MBbl/D in the year-ago quarter.
Expenses
Transportation and blending expenses in the reported quarter increased to C$2,826 million from C$2,399 million a year ago. However, expenses for purchased products declined to C$6,908 million from C$7,177 million in the prior-year quarter.
Capital Investment & Balance Sheet
The company made a total capital investment of C$1,274 million in the quarter under review.
As of Dec 31, 2022, the Canada energy player had cash and cash equivalents of C$4,524 million. Total long-term debt was C$8,691 million. Its total debt-to-capitalization was 24%.
Outlook
For 2023, Cenovus expects upstream production of 800,000-840,000 barrels of oil-equivalent per day (Boe/d). It expects daily oil sand production of 582-642 thousand barrels for the year.
The company expects a downstream throughput volume of 610,000-660,000 barrels per day for 2023.
Cenovus gave its total capital expenditure guidance of $4-$4.5 billion for the year.
Zacks Rank & Stocks to Consider
Cenovus currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco LP’s SUN fourth-quarter 2022 earnings of 42 cents per unit missed the Zacks Consensus Estimate of 77 cents. Weak quarterly earnings resulted from the higher total cost of sales and operating expenses.
Sunoco has witnessed upward estimate revisions for 2023 earnings in the past 30 days. For 2023, Sunoco expects adjusted EBITDA of $850-$900 million.
RPC Inc.’s RES adjusted earnings of 41 cents per share in the fourth quarter beat the Zacks Consensus Estimate of 30 cents. The strong quarterly results were backed by higher activity levels in all the service lines and rising equipment utilization.
As of Dec 31, RPC had cash and cash equivalents of $126.4 million, up sequentially from $73.2 million. Nonetheless, the company managed to maintain a debt-free balance sheet.
Valero Energy Corporation’s VLO fourth-quarter 2022 adjusted earnings of $8.45 per share beat the Zacks Consensus Estimate of $7.45 per share. The strong quarterly results were driven by increased refinery throughput volumes and a higher refining margin.
Valero can benefit from the Gulf Coast export volumes, as fuel demand recovery gets support from Asia economies. The Gulf Coast contributed 59.4% to the total throughput volume in the fourth quarter of 2022.
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