Canadian Beats on Q3 Earnings & Revenues, Increases Dividend

Core Viewpoint - Canadian Natural Resources Limited (CNQ) reported third-quarter 2024 adjusted earnings per share of 71 cents, exceeding the Zacks Consensus Estimate of 67 cents, primarily due to reduced year-over-year expenses, although the bottom line declined from 97 cents in the previous year due to lower production and weaker commodity prices [1] Financial Performance - Total revenues for the quarter were $6.5 billion, down from $7.4 billion in the prior-year period, attributed to reduced product sales, but still surpassed the Zacks Consensus Estimate of $6.4 billion [2] - The company returned approximately C$1.9 billion to shareholders in Q3 2024, which included C$1.12 billion in dividends and C$0.74 billion through share repurchases [4] - Year-to-date, as of October 30, 2024, CNQ has returned approximately C$6.7 billion to shareholders, consisting of C$4.4 billion in dividends and C$2.3 billion through share repurchases [5] Production and Prices - CNQ reported quarterly production of 1,363,086 barrels of oil equivalent per day (Boe/D), a decrease of 2.2% from the prior-year quarter, and below the estimate of 1,402,141 Boe/D [6] - Oil and natural gas liquid (NGL) output decreased to 1,021,572 barrels per day (Bbl/d) from 1,035,153 Bbl/d a year ago, although it exceeded the estimate of 1,016,181 Bbl/d [6] - Natural gas volumes totaled 2,049 million cubic feet per day (MMcf/d), down 4.7% from 2,151 MMcf/d in the previous year, and also missed the estimate of 2,316 MMcf/d [8] - The realized natural gas price decreased 65.8% to 77 Canadian cents per thousand cubic feet from C$2.25 a year ago, missing the prediction of C$1.88 [9] Costs and Capital Expenditure - Total expenses in the quarter were C$6.08 billion, down from C$6.75 billion in the prior-year period, due to lower production costs and financing expenses [12] - Capital expenditure totaled C$1.3 billion, compared to C$1.1 billion a year ago [13] Balance Sheet - As of September 30, CNQ had cash and cash equivalents of C$721 million and long-term debt of C$8.4 billion, with a debt to total capital ratio of approximately 20.1% [14] Guidance - CNQ expects to strengthen its market position in 2024, increasing contracted crude oil transportation capacity to 256,500 Bbl/d, which supports long-term sales strategy and reduces exposure to egress constraints [15] - For 2024, CNQ anticipates total annual output between 1,330,000 Boe/d and 1,380,000 Boe/d, with liquid production expected in the range of 977-1,008 thousand Boe/d [16][17] - The company projects total capital expenditure of C$5,420 million for 2024, with allocations for both conventional and thermal operations [18]