However, the bottom line was lower than the prior-year adjusted earnings of 85 cents as average realized commodity prices fell.
Total revenues of $4,666 million beat the Zacks Consensus Estimate of $4,460 million. Also, the top line improved from third-quarter 2018 revenues of $4,514 million.
Apart from trumping revenue and earnings estimates, the company’s third-quarter results offered something more to buoy long-term investors’ optimism as free cash flow totaled $1,471 million after capital expenditure and dividend payments.
Canadian Natural Resources Limited Price, Consensus and EPS Surprise
Canadian Natural Resources Limited price-consensus-eps-surprise-chart | Canadian Natural Resources Limited Quote
Production & Prices
Canadian Natural reported quarterly production of 1,176,361 barrels of oil equivalent per day (BOE/d), up by 10.9% from the prior-year quarter. Oil and liquids (NGLs) output (accounting for more than 79% of total volumes) increased to 931,546 barrels per day (Bbl/d) from 801,742 Bbl/d a year ago. Crude oil and NGLs production from operations in North America – including synthetic production of 432,203 Bbl/d and bitumen output of 206,395 Bbl/d – came in at 882,865 Bbl/d, higher than the year-ago quarter’s 754,238 Bbl/d due to the contribution from buyout of Devon Energy Corporation’s (NYSE:) Canadian business.
Natural gas volumes recorded a 5.4% year-over-year decline - from 1,553 million cubic feet per day (MMcf/d) to 1,469 MMcf/d in the quarter under review. Production in North America totaled 1,425 MMcf/d compared with 1,489 MMcf/d in the prior year.
Canadian Natural’s realized natural gas price was C$1.64 per thousand cubic feet compared with the year-ago level of C$2.32. Realized oil and NGLs price decreased 4.7% to C$55.19 per barrel from C$57.89 in the third quarter of 2018.
Costs, Capital Expenditure
Total expenses incurred in the quarter were C$4,796 million, higher than C$3,754 million recorded a year ago. Ramp up in transportation costs, foreign exchange loss and the absence of revaluation gains bloated the overall costs. In the reported quarter, capital expenditure summed C$963 million excluding costs associated with the Devon Energy assets.
Dividend & Share Repurchase
The company, which is committed to adding shareholder value, returned C$447 million and C$169 million via dividends and stock buybacks, respectively.
Canadian Natural declared a dividend of 37.5 Canadian cents a share, payable Jan 1, 2020 to its shareholders of record as of Dec 11, 2019.
Balance Sheet
As of Sep 30, the company had C$176 million in cash and cash equivalents, and a long-term debt of C$18,453 million, representing a debt-to-capitalization ratio of approximately 34.7%.
Guidance Maintained
Canadian Natural reiterated its capital expenditure and output forecast for 2019. The company expects capex to be around C$3.8 billion in 2019 and envisions total volumes in the band of 1,087,000-1,146, 000 BOE/d. While liquids output is expected between 839,000 Bbl/d and 888,000 Bbl/d, natural gas production is predicted within 1,485-1,545 MMcf/d. Guidance for crude oil and NGL production from North American operations remains within 231,000-251,000 Bbl/d. The company’s thermal in situ oil sands production outlook is estimated within 157,000-172,000 Bbl/d.
Zacks Rank & Key Picks
Canadian Natural Resources holds a Zacks Rank #3 (Hold).
Meanwhile, investors interested in the energy space could look at some better options like Phillips 66 (NYSE:) and SilverBow Resources, Inc. (NYSE:) that also sport a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Phillips 66 has seen the Zacks Consensus Estimate for 2019 rise 13.8% over 30 days.
SilverBow Resources has seen the Zacks Consensus Estimate for 2019 rise 2.8% over 30 days.
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