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Canadian Natural (CNQ) to Report Q1 Results: What Awaits?

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Canadian Natural Resources Limited CNQ is set to release first-quarter results on May 5. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.94 per share on revenues of $7.1 billion.

Let’s delve into the factors that might have influenced this independent energy company’s results in the March quarter. But it’s worth taking a look at CNQ’s previous-quarter performance first.

Highlights of Q4 Earnings & Surprise History

In the last-reported quarter, this Calgary, Alberta-based upstream operator beat the consensus mark on higher production and commodity price realizations. CNQ had reported adjusted earnings per share of $1.76, ahead of the Zacks Consensus Estimate of $1.67. Revenues of $7.4 billion generated by the firm also came in above the Zacks Consensus Estimate by 4.6%.

Canadian Natural Resources beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 18.7%, on average. This is depicted in the graph below:

Canadian Natural Resources Limited Price and EPS Surprise

Canadian Natural Resources Limited Price and EPS Surprise
Canadian Natural Resources Limited Price and EPS Surprise

Canadian Natural Resources Limited price-eps-surprise | Canadian Natural Resources Limited Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the first-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 139.5% surge year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 36.5% increase from the year-ago period.

Factors to Consider

Canadian Natural Resources is expected to have benefited from a surge in commodity price realizations. In the October-to-December period, the company’s realized natural gas price surged 78.8% to C$4.67 per thousand cubic feet from the year-ago level of C$2.62. Moreover, the realized oil and NGL price jumped 70% to C$72.81 per barrel from C$40.56 in the fourth quarter of 2020. The uptick is most likely to have continued in the first quarter, with oil and gas prices revisiting their multi-year highs above $100 on the back of geopolitical tensions and robust demand. This price boost is likely to have buoyed the revenues and cash flows of the Canadian firm.

The company is also expected to have reaped the reward of higher production during the quarter. CNQ continues to churn out the impressive output from its broad portfolio of low-risk exploration and development projects with strong international exposure. Consequently, the consensus mark for Canadian Natural Resources’ average Q1 volume is pegged at 1,299,206 barrels of oil equivalent per day (BOE/d), rising from the prior-year quarter’s level of 1,178,752 BOE/d.

On a somewhat bearish note, the increase in Canadian Natural Resources’ costs might have dented the company’s to-be-reported bottom line. CNQ’s total costs and expenses in the fourth quarter increased around 36.3% year over year to C$5.8 billion. The upward cost trajectory is likely to have continued in the first quarter due to higher production expenses.

What Does Our Model Say?

The proven Zacks model does not conclusively show that Canadian Natural Resources is likely to beat estimates in the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: CNQ has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.94 per share each.

Zacks Rank: Canadian Natural Resources currently carries a Zacks Rank #1, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.

Stocks to Consider

While an earnings beat looks uncertain for CNQ, here are some firms from the energy space that you may want to consider on the basis of our model:

HighPeak Energy, Inc. HPK has an Earnings ESP of +2.97% and a Zacks Rank #1. The firm is scheduled to release earnings on May 16.

You can see the complete list of today’s Zacks #1 Rank stocks here.

For 2022, HPK has a projected earnings growth rate of 580.3%. Valued at around $2.6 billion, HighPeak Energy has increased around 191.6% in a year.

Calumet Specialty Products Partners, L.P. CLMT has an Earnings ESP of +31.53% and is Zacks #2 Ranked. The firm is scheduled to release earnings on May 6.

CLMT is valued at around $1.1 billion. For 2022, the partnership has a projected earnings growth rate of 70.3%. Calumet has gained around 142.2% in a year.

Western Midstream Partners, LP WES has an Earnings ESP of +5.32% and a Zacks Rank #3. The firm is scheduled to release earnings on May 10.

For 2022, WES has a projected earnings growth rate of 20.2%. Valued at around $9.8 billion, Western Midstream has increased around 32.4% in a year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Western Midstream Partners, LP (WES) : Free Stock Analysis Report

Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report

Calumet Specialty Products Partners, L.P. (CLMT) : Free Stock Analysis Report

HighPeak Energy, Inc. (HPK) : Free Stock Analysis Report

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