Cenovus Energy Inc. CVE reported fourth-quarter 2024 adjusted earnings per share of 5 cents, which missed the Zacks Consensus Estimate of 18 cents. The bottom line also declined from the year-ago figure of 29 cents. Since the earnings release, the company’s shares have fallen almost 8%, closing at $14.06 in the last trading session.
Total quarterly revenues of $8.4 billion missed the Zacks Consensus Estimate of $9.9 billion. The top line decreased from the year-ago level of $9.6 billion.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The weak quarterly results can be primarily attributed to a decline in contributions from the Conventional, Offshore, Canadian Manufacturing and U.S. Manufacturing units.
Cenovus Energy Inc Price, Consensus and EPS Surprise
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 totaled C$2.34 billion, up from C$1.96 billion reported a year ago.
In the December-end quarter, the company recorded daily oil sand production of 626.6 thousand barrels, up 2.3% year over year. The increase can be attributed to higher contributions from Christina Lake partially offset by lower contributions from the Foster Creek and Lloydminster Thermal operations.
The operating margin at the Conventional unit totaled C$88 million, indicating a decline from C$123 million recorded in the year-ago quarter. The company’s daily liquid production was 24.5 thousand barrels compared with 28.9 thousand barrels a year ago.
The Offshore segment generated an operating margin of C$242 million, down from C$370 million in the year-ago quarter. Cenovus recorded daily offshore liquid production of 19.5 thousand barrels, down from 21.1 thousand barrels recorded a year ago.
Downstream
The operating margin from the Canadian Manufacturing unit was C$47 million, down from the year-ago level of C$126 million. It recorded Crude Oil processed volumes of 104.4 thousand barrels per day (MBbl/D).
The operating margin from the U.S. Manufacturing unit was reported at a loss of C$443 million compared with a loss of C$430 million in the year-earlier quarter. Crude oil processed volumes totaled 562.3 MBbl/D, up from 478.8 MBbl/D in the year-ago quarter.
Expenses
Transportation and blending expenses decreased to C$2.82 billion from C$2.89 billion recorded a year ago.
Also, expenses for purchased products increased to C$1 billion from C$663 million in the prior-year quarter.
Capital Investment & Balance Sheet
Cenovus made a total capital investment of C$1.48 billion in the quarter under review.
As of Dec. 31, 2024, the Canada-based energy player had cash and cash equivalents of C$3.10 billion and a long-term debt of C$7.3 billion.
Guidance
For 2025, Cenovus expects total upstream production to be in the band of 805-845 MBoe/d. The midpoint of the range suggests an increase from the 2024 figure of 797.2 MBoe/d. The company also provided its downstream throughput projection in the range of 650-685 MBbls/d, implying an increase from 646.9 MBbls/d reported in 2024.
The company anticipates capital expenditure to be in the band of $4.6-$5 billion for the entire year.
CVE’s Zacks Rank and Key Picks
Currently, CVE carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Antero Resources Corporation AR, NextDecade Corporation NEXT and EOG Resources, Inc. EOG. While Antero Resources and NextDecade presently sport a Zacks Rank #1 (Strong Buy) each, EOG Resources carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Antero Resources, one of the fastest-growing natural gas producers in the United States, boasts a strategic acreage position in the low-risk properties of the Appalachian Basin. The company has more than two decades of premium low-cost drilling inventory in the prolific basin, securing a strong production outlook. AR is well-positioned to capitalize on the increasing demand for LNG, both in the United States and globally.
NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. As demand for LNG continues to grow, the company’s strategic investments in infrastructure and its planned liquefaction capacity provide strong upside potential. With the global LNG market expanding, NEXT is well-positioned to tap into the increasing export demand from the United States.
EOG Resources is an oil and gas exploration and production company with an attractive growth profile, upper-quartile returns and a disciplined management team. With highly productive acreages in premier oil shale plays like the Permian and Eagle Ford, the company has numerous untapped high-quality drilling sites. Additionally, EOG maintains a strong balance sheet and continues to reward shareholders with regular and special dividends.
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