Suncor Energy Q4 Earnings & Sales Beat Estimates, Expenses Up 6%

Core Insights - Suncor Energy Inc. reported fourth-quarter 2024 adjusted operating earnings of 89 Canadian cents per share, exceeding the Zacks Consensus Estimate of 82 Canadian cents, driven by strong production growth in the upstream segment, although it declined from 93 Canadian cents in the same quarter last year due to lower earnings in the downstream segment and increased expenses [1][2] Financial Performance - Operating revenues for the fourth quarter were C$8.9 billion, surpassing the Zacks Consensus Estimate by 4.3%, but down approximately 14% year-over-year due to lower commodity prices [2] - The company declared a quarterly dividend of 57 Canadian cents per share, unchanged from the previous quarter, to be paid on March 25, 2024 [2] - Suncor distributed a total of C$1.7 billion to shareholders, including C$1 billion in share repurchases and C$700 million in dividends [3] - Adjusted funds from operations were C$3.5 billion, with free cash flow of C$1.9 billion for the quarter [3] Production and Operational Highlights - Upstream production reached a record 875,000 barrels per day (bbls/d), a 20% increase from 808,100 bbls/d year-over-year, exceeding the consensus estimate of 846,000 bbls/d [6] - Total oil sands bitumen production hit a record 951,500 bbls/d, up from 866,200 bbl/d in the previous year [6] - The company's E&P volume increased 18.5% to 57,500 barrels of oil equivalent per day (boe/d) from 50,700 boe/d year-over-year, also beating the consensus estimate [7] - Refining throughput was near-record at 486,200 bbls/d, with refinery utilization at 104% [4][14] Cost and Efficiency Metrics - Operating cost per barrel decreased to C$26.55 from C$30.80 in the same quarter last year, attributed to higher production and lower commodity costs [10] - Cash operating costs for oil sands operations dropped to C$26.55 from C$30.80, while Syncrude's cash operating costs per barrel decreased to C$32.80 from C$33.85 [11][10] Segment Performance - Downstream segment adjusted operating earnings were C$410 million, down from C$598 million year-over-year, primarily due to lower benchmark crack spreads [13] - Refined product sales increased to 613,300 bpd from 575,500 bpd in the prior-year quarter, driven by higher refinery throughput [13] Financial Position and Guidance - Total expenses rose 6.2% to C$11.4 billion from the prior-year quarter, with cash flow from operating activities amounting to C$5.1 billion [15][16] - Suncor expects upstream production for 2025 to range from 810,000 boe/d to 840,000 boe/d, with cash operating costs for Oil Sands operations anticipated between C$26-C$29 per barrel [17][19] - Total capital expenditures for 2025 are projected to be between C$6.1 billion and C$6.3 billion [20]