Sales Grew for Canadian Energy Companies Compared to US Peers

Should Investors Consider Canadian Energy Companies?

Sales performance

In 3Q15, sales for Imperial Oil (IMO) and Suncor Energy (SU) rose by 10% and 0.6%, respectively, on a YoY (year-over-year) basis, as compared to falls of 6.5% and 9% for ExxonMobil (XOM) and Chevron (CVX), respectively.

Imperial Oil and Suncor Energy represent the large-cap (large capitalization) Canadian ADRs (American depositary receipts) in the oil and gas sector. Imperial and Suncor are Canadian-based integrated oil and gas companies. ExxonMobil and Chevron represent large-cap US energy companies.

In 3Q15, the gross profits of Imperial and Suncor grew by 11% and 0.5%, respectively, on a YoY basis. However, the gross profit for American energy giants Exxon and Chevron fell by 12% and 22%, respectively, on a YoY basis.

Sales and gross profit are important indicators of growth and financial fitness of companies. Sales account for total revenue earned, whereas gross profit measures sales minus cost of goods sold. The graph above shows the change in sales and gross profit for these companies on a YoY basis in 3Q15.

YTD performance

On a YTD (year-to-date) basis, ExxonMobil and Chevron have fallen 12% and 19%, respectively, and Imperial and Suncor have fallen 25% and 13%, respectively. The US-based energy benchmark Energy Select Sector SPDR ETF (XLE) has fallen about 14% on a year-to-date (or YTD) basis.

The Canadian oil and gas companies outperformed their US peers in sales and gross profit, but they fell by an average of 19% compared to the 15% falls of US-based energy companies on a YTD basis as of November 25, 2015.

Continue to Next Part

Browse this series on Market Realist:

• Part 2 - Imperial Oil Trades Well below Its 100-Day Moving Average

• Part 3 - Canadian Energy Companies Less Sensitive to Natural Gas Prices

• Part 4 - US Energy Companies’ Debt Grew More than Their Canadian Peers’