Cenovus (CVE) Shares Dip 1.2% Since Posting Q3 Earnings Results
Cenovus Energy Inc. CVE shares have declined 1.2% after reporting third-quarter 2023 earnings on Nov 2. The downward price movement can be attributed to the company’s disappointing quarterly upstream production.
Q3 Results
Cenovus reported third-quarter diluted earnings per share of 97 cents, which increased from the year-ago quarter’s 81 cents.
Total quarterly revenues of $10,867 million surpassed the Zacks Consensus Estimate of $9,838 million. The top line significantly declined from the year-ago quarter’s $13,394 million.
Better-than-expected quarterly results can be primarily attributed to higher contributions from the Oil Sands unit and lower expenses.
Cenovus Energy Inc Price, Consensus and EPS Surprise
Cenovus Energy Inc price-consensus-eps-surprise-chart | Cenovus Energy Inc Quote
Operational Performance
Upstream
The quarterly operating margin from the Oil Sands unit was C$3,021 million, increasing from the C$2,220 million reported a year ago. The metric beat our projection of C$2,082.4 million.
In the September-end quarter, the company recorded daily oil sand production of 601.6 thousand barrels, up 2.8% year over year due to higher contributions from its Foster Creek and Sunrise operations. The metric lagged our projection of 641 thousand barrels.
The operating margin at the Conventional unit was C$126 million, down from C$290 million in the year-ago quarter. The metric also missed our projection of C$205.8 million.
In the third quarter, the company’s daily liquid production of 30.2 thousand barrels increased 12.7% year over year and beat our estimate of 29.8 thousand barrels.
The Offshore segment generated an operating margin of C$300 million, down from C$339 million in the year-ago quarter. The metric also lagged our projection of C318.8 million.
In the quarter under review, the company recorded daily offshore liquid production of 20.6 thousand barrels, missing our estimate of 21.6 thousand barrels.
Downstream
From the Canadian Manufacturing unit, the company reported an operating margin of C$170 million, down from C$246 million in the year-ago quarter. The metric also lagged our projection of C$226.7 million. It recorded Crude Oil processed volumes of 108.4 thousand barrels per day (MBbl/D).
The operating margin from the U.S. Manufacturing unit was C$752 million, significantly up from the year-ago quarter’s C$244 million. The metric also beat our projection of C$514.6 million. Crude oil processed volumes were 555.9 MBbl/D, an increase from 435 MBbl/D in the year-ago quarter.
Expenses
Transportation and blending expenses in the reported quarter declined to C$2,164 million from C$2,579 million a year ago. The cost metric also missed our projection of C$2,344.5 million.
Also, expenses for purchased products declined to C$6,620 million from C$10,052 million in the prior-year quarter.
Capital Investment & Balance Sheet
The company made a total capital investment of C$1,025 million in the quarter under review.
As of Sep 30, 2023, the Canada-based energy player had cash and cash equivalents of C$1,262 million. The total long-term debt was C$7,224 million.
Zacks Rank & Stocks to Consider
Cenovus currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PBF Energy Inc. PBF reported third-quarter 2023 earnings of $6.61 per share, beating the Zacks Consensus Estimate of earnings of $4.86. Better-than-expected quarterly results were primarily driven by lower costs and expenses.
Compared to composite stocks belonging to the industry, the leading upstream energy company’s debt-to-capitalization ratio has been consistently lower over the past few years. The company boasts a robust liquidity position, with a cash balance of $1.9 billion, more than sufficient to cover its long-term debt of $1.2 billion. This underscores the company’s strong financial liquidity.
Oceaneering International, Inc. OII reported third-quarter 2023 adjusted earnings of 38 cents per share, which beat the Zacks Consensus Estimate of 27 cents. OII’s outperformance was largely due to the robust results in certain segments.
For the fourth quarter of 2023, OII anticipates a decline in EBITDA on relatively flat revenues from that reported in the third quarter.
Matador Resources Company MTDR reported third-quarter 2023 adjusted earnings of $1.86 per share, which beat the Zacks Consensus Estimate of $1.59. MTDR’s milestone led to better-than-expected third-quarter results, with the highest-ever total production averaging more than 135,000 barrels of oil and natural gas equivalent per day.
For the fourth quarter of 2023, Matador expects an average daily oil equivalent production of 145,000 BOE. The recent guidance indicates a 2% upward revision from the prior mentioned 143,000 BOE/D.
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