Suncor (SU) to Report Q2 Earnings: Is a Surprise in Store?
Suncor Energy SU is set to release second-quarter results on Aug 4. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.74 per share on revenues of $9.9 billion.
Let’s delve into the factors that might have influenced the Canadian energy giant’s performance in the June quarter. But it’s worth taking a look at SU’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last-reported quarter, this Calgary, Alberta-based operator beat the consensus mark on strengthening oil and refined product markets, prompted by a surge in energy prices. SU had reported operating earnings per share of $1.52, 21 cents above the Zacks Consensus Estimate. Revenues of $10.6 billion generated by the firm also came in above the Zacks Consensus Estimate of $8.9 billion.
The company beat the Zacks Consensus Estimate in two of the last four quarters, which resulted in an earnings surprise of 3.6%, on average. This is depicted in the graph below:
Suncor Energy Inc. Price and EPS Surprise
Suncor Energy Inc. price-eps-surprise | Suncor Energy Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line remained the same in the past seven days. The estimated figure indicates a 346.2% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 33.8% improvement from the year-ago period.
Factors to Consider
Suncor Energy is expected to have benefited from a surge in oil price. In the January-to-March period, the company’s realized crude price was $110.27 per barrel compared with the year-ago level of $59.32. The uptick is most likely to have continued in the second quarter, with commodity prices remaining strong on the back of geopolitical tensions and tight fundamentals. This price boost is likely to have buoyed the revenues and cash flows of SU.
The company is also expected to have reaped the reward of higher refined products’ sales during the quarter. In the previous three-month period, Suncor reported fuel sales of 551,900 barrels per day (bpd), up from the year-ago period’s 548,100 bpd. The momentum is likely to have continued in the to-be-reported quarter, with post-pandemic demand recovery driving margins higher.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for Suncor this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Suncor Energy has an Earnings ESP of +11.91% and a Zacks Rank #2.
Other Stocks to Consider
SU is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:
Delek US Holdings, Inc. DK has an Earnings ESP of +4.07% and a Zacks Rank #1. The firm is scheduled to release earnings on Aug 4.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2022, Delek US Holdings has a projected earnings growth rate of 353.5%. Valued at around $2.3 billion, DK has gained around 55.2% in a year.
Calumet Specialty Products Partners, L.P. CLMT has an Earnings ESP of +30.00% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 5.
Calumet topped the Zacks Consensus Estimate by an average of 22.2% in the trailing four quarters. CLMT has gained some 100.4% in a year.
ConocoPhillips COP has an Earnings ESP of +1.21% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 4.
For 2022, ConocoPhillips has a projected earnings growth rate of 143.6%. Valued at around $123 billion, COP has gained around 75.9% in a year.
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