2Q16 estimated and actual performance
Suncor Energy (SU) is expected to post its 3Q16 results on October 26, 2016. Before we proceed with 3Q16 estimates, let’s recap SU’s 2Q16 estimates versus actual performance.
In 2Q16, SU’s revenues of 5.9 billion Canadian dollars missed Wall Street estimates by 3%. Suncor reported EPS (earnings per share) of -0.46 Canadian dollars for the quarter. After adjusting for special items like unrealized foreign exchange gain on US dollar-denominated debt, SU’s adjusted EPS stood at -0.36 Canadian dollars as compared to estimated EPS of -0.26 Canadian dollars.
Suncor’s Oil Sands segment posted a net loss due to wildfires and lower crude oil benchmark prices. Also, the E&P (exploration and production) segment reported a decline in earnings. But the savior was SU’s Refining segment, which witnessed a rise in its net earnings due to wider refined products, regional differentials, and inventory gains.
Suncor’s 3Q16 estimates
According to Wall Street analysts’ estimates, Suncor (SU) is expected to post EPS of 0.09 Canadian dollars. This is 67% lower than Suncor’s 3Q15 adjusted EPS. Comparatively, Suncor posted a loss in 2Q16. SU’s revenues are estimated to be around 8.2 billion Canadian dollars in 3Q16, 9% higher than 3Q15 revenues.
In 3Q16, average crude oil prices have stood lower compared to 3Q15. The lower oil prices could hurt the upstream earnings. Plus, the downstream segment earnings are likely to be lower due to the weaker refining environment in 3Q16 compared to 3Q15. We’ll look at the details in the next part.
Suncor’s peer Cenovus Energy (CVE) is expected to post a loss in 3Q16. ExxonMobil (XOM) and Chevron (CVX) are expected to post 38% and 60% lower earnings in 3Q16 over 3Q15, respectively. For exposure to global stocks, you could consider the Vanguard Total World Stock ETF (VT). The ETF has the highest exposure to North America followed by Europe.