Cenovus (CVE) Tops on Q4 Earnings, Expects '24 Production Hike

Cenovus Energy Inc. CVE reported fourth-quarter 2023 adjusted earnings per share of 29 cents, which beat the Zacks Consensus Estimate of 25 cents. The bottom line is in line with the year-ago quarter’s 29 cents.

Total quarterly revenues of $9.65 billion missed the Zacks Consensus Estimate of $9.73 billion. The top line also declined from the year-ago quarter’s $10.36 billion.

Strong quarterly earnings can be primarily attributed to higher contributions from the Oil Sands unit and lower expenses.

Operational Performance

Upstream

The quarterly operating margin from the Oil Sands unit was C$1.96 billion, increasing from the C$1.64 billion reported a year ago.

In the December-end quarter, the company recorded daily oil sand production of 612.6 thousand barrels, up 0.5% year over year primarily due to higher contributions from its Foster Creek and Sunrise operations.

The operating margin at the Conventional unit was C$123 million, down from C$248 million in the year-ago quarter. In the fourth quarter, the company’s daily liquid production of 28.9 thousand barrels declined 12.2% year over year.

The Offshore segment generated an operating margin of C$370 million, up from C$337 million in the year-ago quarter. In the quarter under review, the company recorded daily offshore liquid production of 21.1 thousand barrels.

Downstream

From the Canadian Manufacturing unit, the company reported an operating margin of C$126 million, down from C$278 million in the year-ago quarter. It recorded Crude Oil processed volumes of 100.3 thousand barrels per day (MBbl/D).

The operating margin from the U.S. Manufacturing unit was a loss of C$430 million, significantly down from the year-ago quarter’s profit of C$280 million. Crude oil processed volumes were 478.8 MBbl/D, an increase from 379 MBbl/D in the year-ago quarter.

Expenses

Transportation and blending expenses in the reported quarter declined to C$2.66 billion from C$2.72 billion a year ago.

Also, expenses for purchased products declined to C$6.56 billion from C$6.92 billion in the prior-year quarter.

Capital Investment & Balance Sheet

The company made a total capital investment of C$1.17 billion in the quarter under review.

As of Dec 31, 2023, the Canada-based energy player had cash and cash equivalents of C$2.23 billion. The total long-term debt was C$7.11 billion.

Guidance

For 2024, Cenovus expects total upstream production of 770-810 MBoe/d, the midpoint of which suggests an increase from the 778.7 MBoe/d reported in 2023.

The company gave its capital expenditure guidance of $4.5-$5 billion for the year.

Zacks Rank & Stocks to Consider

Cenovus currently carries a Zacks Rank #5 (Strong Sell).

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.

Equitrans Midstream ETRN owns, operates, acquires and develops midstream assets, primarily in the Appalachian Basin. It manages natural gas transmission, storage and gathering systems, as well as high and low-pressure gathering lines.

The Zacks Consensus Estimate for ETRN’s 2024 EPS is pegged at 90 cents. It has witnessed upward earnings estimate revisions for 2024 in the past 60 days. ETRN’s 2024 earnings are expected to rise 34.3% year over year.

Energy Transfer ET is a publicly traded limited partnership focused on diverse energy assets in the United States. Its core operations involve natural gas midstream services, transportation, storage, crude oil facilities and marketing assets.

The Zacks Consensus Estimate for ET’s 2024 EPS is pegged at $1.22. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days. ET’s 2024 earnings are expected to rise 18% year over year.

Subsea 7 S.A. SUBCY helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.

The Zacks Consensus Estimate for SUBCY’s 2024 EPS is pegged at 91 cents. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days. SUBCY’s 2024 earnings are expected to soar 277% year over year.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.0% per year. So be sure to give these hand-picked 7 your immediate attention. 

See them now >>

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

Cenovus Energy Inc (CVE) : Free Stock Analysis Report

Energy Transfer LP (ET) : Free Stock Analysis Report

Subsea 7 SA (SUBCY) : Free Stock Analysis Report

Equitrans Midstream Corporation (ETRN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.