Canada's biggest energy firm and the largest oil sands outfit,
Suncor Energy Inc.
) reported mixed first-quarter 2013 results. The volume growth of
Oil Sands along with better refinery and marketing margins aided
earnings. However, these were partially negated by higher
depreciation, depletion, amortization and impairment expenses.
Earnings per share, excluding certain items, came in at 90
Canadian cents (89 U.S. cents) in the first quarter, much above
the Zacks Consensus Estimate of 75 cents. Comparing year over
year, the results improved 7.1% from 84 Canadian cents per
In the reported quarter, total revenue of C$10.02 billion ($9.84
billion) increased 2.7% from the year-ago level though it missed
the Zacks Consensus Estimate by 4.3%.
Quarterly operating earnings of C$1.37 billion were above C$1.32
billion a year ago, while cash flow from operations decreased to
C$2.3 billion from C$2.4 billion in the first quarter of 2012.
Upstream production during the quarter averaged 596,100 barrels
of oil equivalent per day (BOE/d), up from the first-quarter 2012
level of 562,300 BOE/d.
Excluding proportionate production share from the Syncrude joint
venture, oil sands volume was 357,800 barrels per day (Bbl/d),
higher than 305,700 Bbl/d recorded in the prior-year quarter. The
quarter's results were positively influenced by higher volumes
Production from the Syncrude operations fell 11.9% year over year
to 31,200 Bbl/d in the quarter. The decrease is owing to the
unplanned and planned maintenance in mining and upgradation.
Suncor's Exploration and Production segment (consisting of
International and Offshore and Natural Gas segments) produced
207,100 BOE/d against 221,200 BOE/d in the prior-year quarter.
The decrease is primarily due to maintenance of the Terra Nova
subsea infrastructure along with the decline in production in
North America Onshore.
The company's Refining and Marketing segment generated total
refined product sales of 86,200 cubic meters per day, up 7.6%
from the prior-year quarter. The result was aided by the increase
in demand for gasoline.
The depreciation, depletion, amortization and impairment expenses
of Suncor have increased by 5.5% to C$999 million in this quarter
as compared to the first quarter of 2012.
Suncor has increased its quarterly dividend by 53.9% to 20
Canadian cents per share as compared to the previous dividend
declaration of 13 Canadian cents per share. The increased
dividend will be paid on Jun 25, 2013 to the shareholders of
record as of Jun 4, 2013. Suncor also planned to buyback up to
C$2.0 billion shares.
Balance Sheet & Capital Expenditure
As of Mar 31, 2013, Suncor had cash and cash equivalents of C$4.6
billion and total long-term debt (including current portions) of
C$10.4 billion. The debt-to-capitalization ratio was
approximately 20.7%. The company also incurred C$1.5 billion in
capital expenditure during the quarter.
Suncor targets capital spending of almost $7.3 billion for 2013.
Suncor currently retains a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
EPL OIL&GAS INC (EPL): Free Stock Analysis
INTEROIL CORP (IOC): Free Stock Analysis
SEMGROUP CORP-A (SEMG): Free Stock Analysis
SUNCOR ENERGY (SU): Free Stock Analysis
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However, in the energy sector, three firms that are expected to
significantly outperform the broader U.S. equity market over the
next one to three months are
EPL Oil & Gas Inc.
). All three firms sport a Zacks Rank #1 (Strong Buy).