Tepid Report From Suncor Holds Back Oil Sands Stocks

Indie Research

Shares of Suncor Energy (NYSE: SU - News), Canada's largest oil company by market value, are down 2% after the company said its second-quarter profit rose just 4%, lagging well behind the profit increases posted thus far by U.S. and European oil majors. Operating income jumped 17% to the equivalent of nearly 66 cents in U.S. dollar terms. Analysts were expecting an operating profit of almost 72 cents.

Suncor's lukewarm results are weighing on the Oil Sands Stocks Index, which is up just 0.1% today, a performance that is well behind that of the broader market. Suncor said its production in the second quarter plunged 27% to 460,000 barrels of oil equivalent per day from 633,900 barrels per day a year earlier, but the company did not change its full-year production outlook.

Suncor said it produced 243,400 barrels per day in Canada's oil sands region, down 18% from the second quarter of 2010. The company also added that it does anticipate further asset sales this year. Cash flow, a key indicator of the company's ability to finance new projects, jumped 12% to nearly $2.1 billion, Reuters reported.

Looking at other Index members, Oilsands Quest (AMEX: BQI - News) and Canadian Natural Resource (NYSE: CNQ - News) are both up 1% while Cenovus Energy (NYSE: CVE - News) is trading higher by 2%. Imperial Oil (AMEX: IMO - News) is down half a percent while North American Energy (NYSE: NOA - News) is up half a percent.

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