Canadian Natural Resources Limited CNQ reported fourth-quarter 2024 adjusted earnings per share of 66 cents, which missed the Zacks Consensus Estimate of 69 cents. The bottom line also declined from 97 cents in the year-ago quarter due to lower realized natural gas prices and higher year-over-year expenses in the quarter.
Total revenues of $6.8 billion depreciated from $7 billion in the prior-year period due to a year-over-year increase in royalty expenses. However, the figure beat the Zacks Consensus Estimate of $6.4 billion due to increased product sales.
On March 6, CNQ’s board of directors approved a 4.4% increase in its quarterly cash dividend. The figure rose to 58.75 Canadian cents per common share from 56.25 previously. The new dividend will be payable on April 4, 2025, to its shareholders of record as of the close of business on March 21. This marks the company's continued commitment to returning value to shareholders.
This commitment is further evidenced by CNQ's impressive track record of consistently increasing its dividend for 25 years, boasting a remarkable 21% annual growth rate over that period. This consistent dividend growth highlights the board's confidence.
In the fourth quarter of 2024, the company returned around C$1.7 billion directly to its shareholders. This included C$1.1 billion in dividends and C$0.6 billion from the repurchase and cancellation of 11.7 million common shares, purchased at a weighted average price of C$47.08 per share.
The oil and gas exploration and production company delivered strong financial results in the fourth quarter of 2024, highlighted by net earnings of approximately C$1.1 billion. Furthermore, the company reported robust adjusted net earnings from operations of approximately C$2 billion. This strong performance was also reflected in the company's cash flow, with cash flows from operating activities totaling approximately C$3.4 billion and adjusted funds flow reaching approximately C$4.2 billion.
After the year-end, on March 5, 2025, CNQ’s board of directors approved the renewal of its Normal Course Issuer Bid. This allows the company to repurchase up to 10% of its public float for cancellation between March 13, 2025, and March 12, 2026, subject to TSX approval.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
During 2024, the Calgary-based company delivered significant returns to shareholders, amounting to approximately C$7.1 billion. This total was composed of C$4.4 billion in dividends and C$2.7 billion through the repurchase and cancellation of 55.4 million common shares, which were acquired at a weighted average price of C$48.07 per share.
Canadian Natural Resources Limited Price, Consensus and EPS Surprise
Canadian Natural Resources Limited price-consensus-eps-surprise-chart | Canadian Natural Resources Limited Quote
CNQ’s Production & Prices
Canadian Natural reported quarterly production of 1,470,428 barrels of oil equivalent per day (Boe/D), up 3.6% from the prior-year quarter’s level. Moreover, the figure beat our estimate of 1,419,622 Boe/D.
The oil and natural gas liquid (NGL) output (accounting for around 75% of total volumes) increased to 1,090,002 barrels per day (Bbl/d) from 1,047,541 Bbl/d recorded a year ago. Moreover, the figure beat our estimate of 1,044,635 Bbl/d.
Natural gas volumes totaled 2,283 million cubic feet per day (MMcf/d), up 2.3% from 2,231 MMcf/d recorded in the year-ago period. Furthermore, the figure beat our estimate of 2,250 MMcf/d.
Natural Gas production in North America reached 2,273 MMcf/d in the fourth quarter of 2024, compared with 2,218 MMcf/d in the fourth quarter of 2023. Additionally, the figure beat our estimate of 2,238 MMcf/d.
Exploration and production activities in North America, not including thermal in situ methods, reported an average output of 255,729 barrels per day. This indicates a 12.1% year-over-year increase during this quarter. Meanwhile, thermal in situ production volume decreased to 276,231 Bbl/d from 278,422 Bbl/d recorded a year ago. Furthermore, the figure missed our estimate of 291,261 Bbl/d.
In the fourth quarter of 2024, the company achieved record quarterly production in its Oil Sands Mining and Upgrading operations, reaching 534,631 barrels per day (bbl/d) of synthetic crude oil (“SCO”), including planned turnaround activities. This represented a 7% increase in quarterly production approximately 34,500 bbl/d compared with the fourth quarter of 2023.
The company set a record for annual Oil Sands Mining and Upgrading production in 2024, reaching 472,245 bbl/d of SCO, a 5% increase or roughly 21,000 bbl/d from 2023.
The realized natural gas price decreased 45.2% to C$1.38 per thousand cubic feet from the year-ago level of C$2.52. The figure missed our prediction of C$1.81 per thousand cubic feet. The realized oil and NGL price increased 8.4% to C$75.22 per barrel from C$69.39 in the fourth quarter of 2023.
The company also achieved industry-leading annual operating costs for Oil Sands Mining and Upgrading, amounting to C$20.97 per barrel in the fourth quarter of 2024.
At the Athabasca Oil Sands Project (“AOSP”), the planned turnaround was completed on Oct. 18, 2024. In addition, the company completed a Debottleneck Project at the Scotford Upgrader, which increased the gross capacity of AOSP by approximately 8,000 bbl/d in October 2024.
In 2024, the company achieved a record total production of approximately 1,363,000 Boe/d, with a record corporate liquids production of about 1,006,000 bbl/d. The total corporate liquids operating costs were C$18.56 per bbl. The company also reached record Oil Sands Mining and Upgrading production of approximately 472,000 bbl/d of zero-decline SCO, with upgrader utilization at 99%, including planned turnarounds. The operating costs for Oil Sands Mining and Upgrading were C$22.88 per bbl of SCO. Additionally, the company achieved record thermal in situ production of around 271,000 bbl/d of long-life, low-decline production, with operating costs of C$11.04 per bbl.
CNQ’s Costs & Capital Expenditure
Total expenses in the quarter were C$7.9 billion, up from C$6.6 billion recorded in the year-ago period. The increase was driven by higher costs in transportation, blending and feedstock, along with increased interest and financing expenses.
Capital expenditure totaled C$1.3 billion compared with C$1 billion a year ago.
CNQ’s Balance Sheet
As of Dec. 31, CNQ had cash and cash equivalents worth C$131 million and long-term debt of C$16.4 billion, with a debt to total capital of about 50%.
CNQ’s Guidance
For 2024, CNQ expects a 12% increase in production, targeting a range of 1,510 MBOE/d to 1,555 MBOE/d. The company anticipates a 14% rise in natural gas production, with a targeted range of 2,425 MMcf/d to 2,480 MMcf/d. The company plans to allocate 60% of free cash flow to shareholders, continuing its 25-year track record of increasing dividends.
CNQ currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Earnings at a Glance
While we have discussed CNQ’s fourth-quarter results in detail, let us take a look at three other key reports in this space.
Oil and gas equipment and services provider Liberty Energy LBRT reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, due to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Another oil and gas equipment and services provider Halliburton Company HAL posted a fourth-quarter 2024 adjusted net income per share of 70 cents, same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers indicated softer activity in the region of North America, partly offset by improved fluid work in the Gulf of Mexico.
As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.
Energy infrastructure provider Kinder Morgan KMI reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.
As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.
This article originally published on Zacks Investment Research (zacks.com).
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