Suncor Energy Inc. (SU) is set to report first-quarter 2025 earnings on May 6, after the closing bell. The Zacks Consensus Estimate for earnings is pegged at 86 cents per share and the same for revenues is pinned at $8.34 billion.Let us delve into the factors that might have influenced SU’s performance in the to-be-reported quarter. Before that, it is worth taking a look at the company’s performance in the last reported quarter.Highlights of SU’s Q4 Earnings & Surprise HistoryIn the previous reported quarte ...

Core Viewpoint - Suncor Energy Inc. (SU) is a major integrated energy company with a diversified business model, facing recent challenges in stock performance but showing potential for long-term growth in the energy sector [1][6]. Group 1: Company Overview - Suncor Energy operates through three main segments: Oil Sands, Exploration and Production, and Refining and Marketing [1][2]. - The company has a strong market position in Canada, the United States, and internationally, having been founded in 1917 and headquartered in Calgary, Canada [1]. Group 2: Recent Performance - In the last three months, SU's share price declined by 13.6%, which was less severe than the sub-industry's decrease of 17.6% [2]. - SU achieved record operational performance in 2024, with upstream output reaching 827,600 bbl/d and 98% refinery utilization [7]. - The company generated C$7.4 billion in free funds flow, flat year over year, demonstrating strong cost control and operational leverage [8]. Group 3: Strengths - SU holds significant proved and probable reserves in the oil sands, ensuring stable production for decades [9]. - The company exceeded all 2024 targets under its three-year plan, including breakeven cost reduction goals and production growth [10]. - Improvements in legacy assets like Syncrude and the Base Plant have enhanced operational stability and reduced per-barrel costs [8]. Group 4: Challenges - Suncor's fourth-quarter revenues dropped by 11.6% year over year due to weaker crude prices and refining margins [11]. - The company is heavily reliant on oil sands, which are subject to regulatory scrutiny and ESG concerns [13]. - Earnings remain sensitive to commodity price fluctuations, and prolonged low prices could weaken free cash flow [13][16]. Group 5: Investment Considerations - Given the mix of operational strengths and potential challenges, a hold strategy may be advisable for investors, waiting for a more opportune entry point before adding SU stock to their portfolios [16].

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Suncor Energy (SU) , which belongs to the Zacks Oil and Gas - Integrated - Canadian industry.This energy company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 15.63%.For the last reported quarter, Suncor Energy came out with earn ...

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Group 1: Company Overview - Suncor Energy is a major player in the Oil & Gas industry, based in Alberta, and is one of Canada's largest oil producers [1] - The company is known for its operations in the Athabasca oil sands, which is among the largest oil reserves globally [1] Group 2: Investment Focus - The analysis emphasizes a focus on undervalued and disliked companies or industries with strong fundamentals and good cash flows [1] - There is a particular interest in sectors such as Oil & Gas and consumer goods, especially those that have been overlooked for unjustified reasons [1] Group 3: Investment Strategy - The investment strategy leans towards long-term value investing, while also considering potential deal arbitrage opportunities [1] - The analysis expresses a preference for businesses that are easily understandable, avoiding high-tech and certain consumer goods sectors [1]

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Group 1 - Clearway Energy (CWENA) is currently outperforming its Oils-Energy peers with a year-to-date return of 12.7%, while the average return for the sector is -1.9% [4] - The Zacks Rank for Clearway Energy is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - The consensus estimate for CWENA's full-year earnings has increased by 1.4% over the past three months, reflecting stronger analyst sentiment [3] Group 2 - Clearway Energy is part of the Alternative Energy - Other industry, which consists of 47 stocks and currently holds a Zacks Industry Rank of 56 [5] - The average return for stocks in the Alternative Energy - Other industry is -2.2% year-to-date, further highlighting Clearway Energy's strong performance [5] - In contrast, Suncor Energy, another stock in the Oils-Energy sector, has a year-to-date return of 0.4% and also holds a Zacks Rank of 2 (Buy) [4][6]

Core Viewpoint - Suncor Energy's recent earnings report shows a mixed performance with strong production growth in the upstream segment but challenges in the downstream segment and overall revenue decline due to lower commodity prices [2][3][5]. Financial Performance - Adjusted operating earnings for Q4 2024 were 89 Canadian cents per share, exceeding the Zacks Consensus Estimate of 82 Canadian cents, but down from 93 Canadian cents in the same quarter last year [2]. - Operating revenues reached $8.9 billion, surpassing estimates by 4.3%, but decreased approximately 14% year over year due to lower commodity prices [3]. - Total expenses increased by 6.2% to C$11.4 billion compared to the prior-year quarter [17]. Shareholder Returns - The company distributed a total of C$1.7 billion to shareholders in Q4 2024, including C$1 billion in share repurchases and C$700 million in dividends [4]. - A quarterly dividend of 57 Canadian cents per share was declared, unchanged from the previous quarter [3]. Production and Operational Highlights - Upstream production reached a record 875,000 barrels per day (bbls/d), a 20% increase year over year, and exceeded the consensus estimate of 846,000 bbl/d [7]. - Oil sands bitumen production hit a record of 951,500 bbls/d, up from 866,200 bbls/d in the previous year [7]. - Refining throughput was near-record at 486,200 bbls/d, with refinery utilization at 104% [5][16]. Cost Management - Operating cost per barrel decreased to C$26.55 from C$30.80 in the corresponding period of 2023, attributed to higher production and lower commodity costs [9][12]. - Cash operating costs for Oil Sands operations are expected to range from C$26 to C$29 per barrel for 2025 [21]. Future Guidance - For 2025, Suncor Energy expects upstream production to range from 810,000 to 840,000 barrels of oil equivalent per day (boe/d) [19]. - Total capital expenditures for 2025 are projected to be between C$6.1 billion and C$6.3 billion [22]. Market Sentiment - There has been an upward trend in estimates revision, with the consensus estimate shifting by 21.95% [23]. - The stock has a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [25].

Financial Performance - Suncor generated adjusted funds from operations of $13.846 billion in 2024, or $10.87 per common share, compared to $13.325 billion, or $10.19 per common share, in the prior year [75]. - Net earnings for 2024 were $6.016 billion, or $4.72 per common share, down from $8.295 billion, or $6.34 per common share in 2023 [76]. - The company reported a cash flow from operating activities of $15.960 billion in 2024, compared to $12.344 billion in 2023 [76]. - Adjusted operating earnings increased to $6.884 billion in 2024, compared to $6.677 billion in 2023, reflecting a growth of 3.1% [93]. - Corporate loss before income taxes was $(1,883) million in 2024, compared to $(1,296) million in 2023, influenced by unrealized foreign exchange losses and asset impairments [188]. - Adjusted funds from operations were $3.493 billion ($2.78 per common share) in Q4 2024, down from $4.034 billion ($3.12 per common share) in Q4 2023 [199]. - Net earnings for Q4 2024 were $818 million, significantly lower than $2.820 billion in Q4 2023, influenced by lower refined product realizations and increased royalties [198]. - The effective tax rate increased to 26.5% in 2024 from 21.7% in 2023, influenced by non-taxable gains and foreign exchange losses [195]. Production and Sales - Total Oil Sands production volumes increased to 773.8 mbbls/d in 2024, up from 689.6 mbbls/d in 2023, representing a 12.6% increase [67]. - Suncor achieved record upstream production of 827,600 bbls/d in 2024, up from 745,700 bbls/d in 2023, representing an increase of approximately 11.5% [84]. - Total Oil Sands bitumen production increased to 907,000 bbls/d in 2024, up from 819,800 bbls/d in 2023, primarily due to increased working interest in Fort Hills and strong mining performance [132]. - Total refined product sales reached a record of 600,400 bbls/d in 2024, up from 553,100 bbls/d in 2023, driven by higher refinery throughput [182]. - Total production averaged 53,800 mboe/d in 2024, a decrease from 56,100 mboe/d in 2023, with E&P Canada production increasing to 49,700 bbls/d [165]. Capital Expenditures and Investments - Capital expenditures for 2024 were $6.166 billion, an increase from $5.573 billion in 2023 [64]. - The company plans to allocate $6.1 billion to $6.3 billion for capital spending in 2025 [251]. - Economic investment expenditures in Oil Sands Base were $1.852 billion in 2024, focusing on the Upgrader 1 coke drum replacement and a new cogeneration facility [227]. - Refining and Marketing capital expenditures were $1.186 billion in 2024, primarily for asset sustainment and maintenance activities [233]. - Exploration and Production capital expenditures were $862 million in 2024, mainly for the West White Rose Project and SeaRose Asset Life Extension Project [232]. Debt and Financial Position - Suncor's net debt decreased to $6.861 billion in 2024 from $9.852 billion in 2023, reflecting improved financial condition [64]. - Total debt to total debt plus shareholders' equity decreased to 18.9% in 2024 from 21.1% in 2023 [243]. - The company reported a net debt to adjusted funds from operations ratio of 0.5 times in 2024, down from 0.7 times in 2023 [243]. - Cash and cash equivalents at the end of 2024 were $3.484 billion, compared to $1.729 billion at the end of 2023 [243]. - Available credit facilities increased to $5.475 billion at the end of 2024, up from $4.957 billion at the end of 2023 [255]. Operational Efficiency - The company achieved a refining and marketing gross margin of $36.40 per barrel in 2024, down from $45.00 per barrel in 2023 [67]. - Suncor's upgrader utilization reached 98% in 2024, up from 92% in 2023, indicating improved operational efficiency [84]. - Oil Sands operations cash operating costs per barrel decreased to $26.90 in 2024 from $29.70 in 2023, due to increased production and cost optimizations [148]. - Fort Hills cash operating costs per barrel decreased to $32.80 in 2024 from $34.40 in 2023, primarily due to increased production volumes [149]. - Syncrude cash operating costs per barrel decreased to $35.15 in 2024 from $37.15 in 2023, driven by increased production and workforce optimizations [150]. Market Conditions - The average price realization for upgraded net SCO and diesel was $97.91 per barrel in 2024, slightly down from $99.40 per barrel in 2023 [67]. - The average WTI crude oil price was $75.70/bbl in 2024, down from $77.60/bbl in 2023, reflecting a decrease of 2.9% [101]. - The average AECO natural gas benchmark price decreased to $1.35/GJ in 2024 from $2.50/GJ in 2023 [110]. - The Alberta power pool price averaged $62.80/MWh in 2024, down from $133.65/MWh in the previous year [111]. - The average WTI crude oil price in Q4 2024 was $70.30 per barrel, down from $78.35 per barrel in Q4 2023, indicating a decrease of approximately 10.5% [219].

Core Viewpoint - Suncor Energy has filed its 2024 Annual Report and renewed its Normal Course Issuer Bid (NCIB) to repurchase up to 123.8 million common shares, representing approximately 10% of its public float, indicating a strategic move to enhance shareholder value [1][3][4]. Group 1: Annual Disclosure Documents - Suncor Energy has filed its 2024 Annual Report, Annual Information Form, and Management Proxy Circular [1]. - The annual disclosure documents can be accessed on Suncor's profile on sedarplus.com, sec.gov, or the company's website [2]. Group 2: Normal Course Issuer Bid (NCIB) - The TSX has accepted Suncor's notice to renew its NCIB, allowing the company to purchase up to 123,800,000 common shares from March 3, 2025, to March 2, 2026 [3]. - As of February 18, 2025, Suncor had 1,238,456,851 common shares issued and outstanding, with the NCIB representing about 10% of the public float [3][4]. - Under the previous NCIB, Suncor repurchased 61,065,792 shares for approximately $3.258 billion at a weighted average price of $53.35 per share [5]. Group 3: Share Repurchase Strategy - Suncor believes that repurchasing its own shares is an attractive investment opportunity and aligns with the best interests of the company and its shareholders [4][9]. - The company plans to limit daily purchases under the NCIB to no more than 25% of the average daily trading volume, which is approximately 2,017,894 common shares [6]. - An automatic share purchase plan is expected to be implemented in relation to the NCIB starting March 3, 2025 [6]. Group 4: Company Overview - Suncor Energy is Canada's leading integrated energy company, involved in oil sands development, offshore oil production, and petroleum refining, as well as retail and wholesale distribution networks [12]. - The company is also focused on transitioning to a lower-emissions future through investments in lower emissions intensity power and renewable feedstock fuels [12].