Suncor Energy Inc. (NYSE:SU) reported third-quarter 2016 operating earnings per share of 16 U.S cents. The Zacks Consensus Estimate was of a loss of 8 U.S. cents. The company had posted earnings of 21 U.S. cents per share in the year-ago comparable quarter. Strong upstream production, lower operating costs and record crude throughput led to the outperformance in the quarter under review.
Moreover, quarterly revenues of U.S$5.5 billion decreased from U.S$5.7 billion in the year-ago quarter. Also, the top line missed the Zacks Consensus Estimate of U.S$6.5 billion.
Suncor recorded quarterly operating earnings of C$346 million. The company had earned C$410 million in the year-ago quarter. Moreover, cash flow from operations increased to C$2,025 million from C$1,882 million in the third quarter of 2015.
Production
Total upstream production in the reported quarter was 728,100 barrels of oil equivalent per day (BOE/d), up 28.6% from the prior-year level of 566,100 BOE/d.
Oil Sands operations volume was 433,700 barrels per day (Bbl/d) as against 430,300 Bbl/d in the year-ago quarter.
SUNCOR ENERGY Price, Consensus and EPS Surprise
Production from Syncrude operations was 183,800 Bbl/d in the quarter compared with 28,100 Bbl/d in the year-ago quarter.
Suncor’s Exploration and Production segment (consisting of International and Offshore and Natural Gas segments) produced 110,600 BOE/d. The segment had produced 107,700 BOE/d in the prior-year quarter.
Refinery utilization came in at 101% as against the year-ago quarter level of 96%.
Product Sales
The company’s refined product sales of 548,700 Bbl/d increased from the prior-year quarter level of 546,400 Bbl/d.
Balance Sheet & Capital Expenditure
As of Sep 30, 2016, Suncor had cash and cash equivalents of C$3.1 billion and total long-term debt (including current portions) of C$15.9 billion. The total debt-to-capitalization ratio was approximately 26.5%. The company incurred capital expenditure of C$1.7 billion in the quarter.
Guidance
Suncor reduced its 2016 capital spending projection to C$5.8–C$6.0 billion from C$6.0–C$6.5.
The company raised its guidance for the total production in 2016 to 610,000–625,000 BOE/d from the prior projection of 585,000–620,000 BOE/d. Suncor projected Oil Sands sales in the band of 370,000–390,000 Bbl/d in 2016.
Refinery throughput is expected in the range of 425,000–435,000Bbl/d. Refined products sales are anticipated in the 520,000-530,000Bbl/d band.
Zacks Rank
Suncor currently carries a Zacks Rank #3 (Buy), implying that it will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include Enviva Partners, LP (NYSE:EVA) , Ultra Petroleum Corp. (OTC:UPLMQ) and W&T Offshore Inc. (NYSE:WTI) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Enviva Partners posted an average positive earnings surprise of 0.19%.
Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.
In the last four quarters, W&T Offshore posted an average positive earnings surprise of 23.63%.
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SUNCOR ENERGY (SU): Free Stock Analysis Report
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