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Cenovus Energy (CVE) to Report Q1 Earnings: What's in Store?

Zacks Equity Research

Cenovus Energy Inc. CVE is set to report first-quarter 2020 results on Apr 29, before the opening bell.

In the last reported quarter, the leading integrated energy company missed the Zacks Consensus Estimate owing to an uptick in transportation and blending expenses along with lower margins from the Refining and Marketing business. Notably, the company missed the consensus estimate in three of the prior four quarters, the average negative surprise being 76.12%. This is depicted in the graph below:

Cenovus Energy Inc Price and EPS Surprise

 

Cenovus Energy Inc Price and EPS Surprise
Cenovus Energy Inc Price and EPS Surprise

Cenovus Energy Inc price-eps-surprise | Cenovus Energy Inc Quote

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Let’s see how things have shaped up prior to this announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for first-quarter loss per share of 19 cents has witnessed three downward revisions and one upward revision over the past 60 days. The estimated figure suggests a decline of 480.0% from the prior-year reported number.

The consensus estimate for first-quarter revenues of $3.23 billion indicates a 17.4% decline from the year-ago reported figure.

Factors to Consider

Weak crude prices are likely to have hurt Cenovus Energy’s upstream operations in the first quarter. Low global energy demand owing to the coronavirus outbreak mostly led oil prices to trade in the bearish territory, especially in the last two months of the March quarter. The last month saw the lowest price in the quarter since the OPEC and Russia failed to agree on how much oil production to cut amid the pandemic.

However, we expect total production from continuing operations to have increased year over year, thanks to the company’s oil sand projects. The consensus estimate for total production from continuing operations is pinned at 471,003 barrels of oil equivalent per day (BoE/D), suggesting an increase from the year-ago quarter’s 447,270 BoE/D.

Earnings Whispers

Our proven model does not indicate an earnings beat for Cenovus Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases chances of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company’s Earnings ESP is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 19 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cenovus Energy currently carries a Zacks Rank #3.

Stocks to Consider

Here are some companies from the Energy space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Enbridge Inc ENB has an Earnings ESP of +2.57% and a Zacks Rank #3. The company is scheduled to release first-quarter results before the opening bell on May 7. You can see the complete list of today’s Zacks #1 Rank stocks here.

Concho Resources Inc. CXO has an Earnings ESP of +1.25% and a Zacks Rank of 3. It is scheduled to report first-quarter results on Apr 30, after the closing bell.

Laredo Petroleum, Inc. LPI has an Earnings ESP of +4.52% and a Zacks Rank #3. The firm is scheduled to release earnings on May 6, after the closing bell.

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Enbridge Inc (ENB) : Free Stock Analysis Report
 
Concho Resources Inc. (CXO) : Free Stock Analysis Report
 
Cenovus Energy Inc (CVE) : Free Stock Analysis Report
 
Laredo Petroleum, Inc. (LPI) : Free Stock Analysis Report
 
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