3Q16 estimated and actual performance
Suncor Energy (SU) is expected to post its 4Q16 results on February 8, 2017. Before we proceed with 4Q16 estimates, let’s recap SU’s 3Q16 estimates versus its actual performance.
In 3Q16, SU’s revenues of 7.4 billion Canadian dollars missed Wall Street estimates by 7%. However, Suncor’s adjusted EPS surpassed Wall Street analysts’ consensus estimates. Suncor reported EPS (earnings per share) of 0.24 Canadian dollars for the quarter. After adjusting for special items, SU’s adjusted EPS stood at 0.21 Canadian dollars, beating analysts’ estimated EPS of 0.09 Canadian dollars.
Suncor’s Oil Sands segment, which posted a net loss in 3Q15, posted a net profit in 3Q16. Also, the E&P (exploration and production) segment reported positive net earnings for 3Q16. But SU’s Refining segment witnessed a fall in its net earnings.
Suncor’s 4Q16 estimates
According to Wall Street analyst estimates, Suncor (SU) is expected to post EPS of 0.21 Canadian dollars, which is in line with Suncor’s 3Q16 adjusted EPS. Comparatively, Suncor posted a loss in 4Q15. SU’s revenues are estimated to be around 8.4 billion Canadian dollars in 4Q16, 27% higher than 4Q15 revenues.
In 4Q16, average crude oil prices have stood higher compared to 4Q15. This could result in better upstream earnings. However, the downstream earnings are uncertain due to mixed regional refining cracks in 4Q16 compared to 4Q15. We’ll look at the details in the next part.
Suncor’s peers ExxonMobil (XOM) and Royal Dutch Shell (RDS.A) are also expected to post 5% and 19% higher EPS in 4Q16 compared to 4Q15. Also, BP (BP) is expected to see its earnings more than double in 4Q16 over 4Q15. For exposure to global stocks, you could consider the Vanguard Total World Stock ETF (VT). The ETF has the highest exposure to North America (around 57%), followed by Europe.