How Suncor (SU) Looks Ahead of Q3 Earnings: Things to Note
Suncor (SU) expects better average oil sands sales volumes in Q3, which in turn, might have aided the company's third-quarter revenues and cash flows.
Suncor Energy Inc. SU is set to release third-quarter 2021 results on Wednesday Oct 27. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 63 cents per share while the same for revenues stands at $9.07 billion.
Let’s delve into the factors that might have impacted this Canadian energy giant’s performance in the September quarter. But it’s worth taking a look at its previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, this Calgary, Alberta-based firm’s operating earnings per share of 39 cents beat the Zacks Consensus Estimate of 36 cents. The bottom line also rebounded from the year-ago loss of 71 cents per share. This outperformance is led by a ramped-up production in the upstream segment and improved refined product sales.
Quarterly operating revenues of $7.4 billion came ahead of the Zacks Consensus Estimate of $6.8 billion. Moreover, the top line rose 141.74% from $3.06 billion in the year-ago quarter.
As far as earnings surprises are concerned, Suncor’s bottom line beat the Zacks Consensus Estimate in three of the last four quarters and missed the mark in the remaining one, delivering a surprise of 86.91%, on average. This is depicted in the graph below:
Suncor Energy Inc. Price and EPS Surprise
Factors to Consider for Q3
Suncor’s average oil sands sales volumes in the second quarter were 617.4 thousand barrels per day (MBbls/d), up 10.3% from the year-ago quarter’s output of 559.5 MBbls/d, a trend that most likely continued in the third quarter on increased utilization rates. The Zacks Consensus Estimate for oil sands sales volumes is pegged at 606 MBbls/d, indicating a rise of 12.4% from the year-ago quarter's reported figure. This upside is expected to have supported the company’s third-quarter revenues and cash flows.
The integrated energy company anticipates spending the majority of its money in the second and the third quarter of each year as it attempts to complete all its maintenance work between April and October and leave only little for the winter months. As a consequence, Suncor's increased capital expenditures are expected to have escalated its costs, hampering its earnings in the quarter under review.
What Does Our Model Say?
The proven Zacks model does not conclusively predict a beat for Suncor this earnings season. 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:Suncor has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 63 cents per share each.
Zacks Rank:Suncor sports a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
While an earnings beat looks uncertain for Suncor, here are some firms from the energy space that you may want to consider on the basis of our model:
Oceaneering International, Inc. OII has an Earnings ESP of +100.00% and a Zacks Rank #3, currently. The firm is scheduled to release earnings on Oct 27.
Royal Dutch Shell plc (RDS.A) has an Earnings ESP of +4.13% and is presently Zacks #1 Ranked. The firm is scheduled to release earnings on Oct 28.
Diamondback Energy, Inc. FANG has an Earnings ESP of +7.02% and a Zacks Rank#2 at present. The firm is scheduled to release earnings on Nov 1.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Royal Dutch Shell PLC (RDS.A): Free Stock Analysis Report
Suncor Energy Inc. (SU): Free Stock Analysis Report
Oceaneering International, Inc. (OII): Free Stock Analysis Report
Diamondback Energy, Inc. (FANG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research