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What to Expect from Suncor’s Fourth-Quarter Earnings

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Third-quarter estimated and actual performance

Suncor Energy (SU) plans to post its fourth-quarter results on February 5. Before we proceed with the fourth-quarter estimates, let’s recap Suncor’s third-quarter performance compared to the estimates.

In the third quarter, Suncor’s revenues missed analysts’ estimates by 5%. The company’s third-quarter adjusted EPS was 0.96 Canadian dollars, which missed the estimated EPS of 1.00 Canadian dollars by ~4%. However, Suncor’s third-quarter adjusted EPS was 85% higher than its adjusted EPS in the third quarter of 2017.

Suncor’s adjusted earnings rose from 0.9 billion Canadian dollars in the third quarter of 2017 to 1.6 billion in the third quarter. The adjusted earnings rose due to a rise in oil sands earnings, exploration and production earnings, and refining and marketing earnings.

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Suncor’s fourth-quarter estimates

Analysts estimate that Suncor could post an EPS of 0.60 Canadian dollars in the fourth quarter. The estimate is 24% lower than Suncor’s adjusted EPS in the fourth quarter of 2017 and 37% lower than its adjusted EPS in the third quarter. Suncor’s revenues are estimated to be ~9.9 billion Canadian dollars in the fourth quarter, which is ~10% higher than its revenues in the fourth quarter of 2017.

In the fourth quarter, Suncor’s upstream earnings could rise year-over-year due to record volumes and higher oil prices. However, the downstream earnings could fall due to weaker refining cracks. We’ll discuss the segmental outlook in Part 2.

Chevron (CVX), Royal Dutch Shell (RDS.A), and BP (BP) are expected to post 165%, 15%, and 27% higher EPS in the fourth quarter—compared to the fourth quarter of 2017. Total (TOT) and ExxonMobil (XOM) are also expected to post 26% and 22% YoY higher EPS in the fourth quarter.

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