Second-quarter estimated and actual performance
Suncor Energy (SU) plans to post its third-quarter earnings results on October 31. Before we take a look at its third-quarter estimates, let’s recap Suncor’s second-quarter performance compared to the estimates.
In the second quarter, Suncor’s revenue surpassed analysts’ estimates by 12%. The company’s second-quarter adjusted EPS stood at 0.73 Canadian dollars, exceeding the estimate of 0.70 Canadian dollars by ~4%. Suncor’s second-quarter adjusted EPS stood much higher than its adjusted EPS of 0.12 Canadian dollars in the second quarter of 2017.
Suncor’s adjusted earnings rose from 0.2 billion Canadian dollars in the second quarter of 2017 to 1.2 billion Canadian dollars in the second quarter of 2018 due to a rise in exploration and production earnings and refining and marketing earnings. The company’s oil sands earnings also switched to profit in the quarter.
Suncor’s third-quarter estimates
Analysts expect Suncor to post EPS of 0.93 Canadian dollars in the third quarter—79% higher than its adjusted EPS in the third quarter of 2017 and 28% higher than its adjusted EPS in the second quarter. Suncor’s third-quarter estimated EPS are its highest quarterly EPS in the past three years. Its revenue is expected to be ~11.5 billion Canadian dollars in the quarter, ~43% higher than its revenue in the third quarter of 2017.
In the quarter, average crude oil prices stood higher than they were in the third quarter of 2017, which may have led to higher YoY (year-over-year) upstream earnings for the company. However, its downstream earnings are likely to be lower due to the weaker refining crack environment in the third quarter than in the third quarter of 2017.
Suncor’s peers Chevron (CVX), Royal Dutch Shell (RDS.A), and BP (BP) are also expected to post rises of 148%, 52%, and 41%, respectively, in their EPS in the third quarter compared to the third quarter of 2017. Total (TOT) and ExxonMobil (XOM) are expected to post EPS rises of 38% YoY and 27% YoY, respectively, in the quarter.