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Suncor Energy Earnings: An Early Look

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With hundreds of companies having already reported quarterly results, we're now in the heart of earnings season. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Let's turn to Suncor Energy (NYSE: SU  ) . The energy giant is one of the biggest players in the Canadian oil sands of Alberta, as high oil prices have made it economically viable to recover crude using relatively expensive production methods. Let's take an early look at what's been happening with Suncor Energy over the past quarter and what we're likely to see in its quarterly report Tuesday.

Stats on Suncor Energy

Analyst EPS Estimate


Change from Year-Ago EPS


Revenue Estimate

$10.52 billion

Change from Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo Finance.

Can Suncor Energy keep digging up black gold?
Analysts haven't made major changes to their calls on Suncor over the past three months, reducing earnings-per-share estimates by just $0.03. The stock price has also barely budged, falling less than 1% since early November.

Suncor has a huge advantage in the oil sands because it has its own refinery capacity in the region. Because the oil sands produce heavy crude that requires special refining, the glut of production has caused major problems for competitors Penn West Petroleum (NYSE: PWE  ) and Canadian Natural Resources (NYSE: CNQ  ) , which have had to cut down on heavy-crude production or export oil at discounted prices. By contrast, Suncor is able to get prices much closer to global rates on 98% of its production.

That could all change if more pipelines come online. Enbridge (NYSE: ENB  ) in particular is looking to increase its pipeline capacity in the region, but that won't come until mid-2014. Until then, Suncor has a chance to capitalize fully on its refining advantage.

Yet another concern is the reduction in import demand from the U.S., as domestic producers manage to supply more of the nation's overall energy needs. Because costs of production in the oil sands have more than tripled in the past 10 years, even Suncor has had to put expansion plans on hold.

Suncor's earnings report should shed some light on these issues and give investors a sense of how the company is addressing them. Despite concerns, Suncor still has plenty of advantages over its peers that could help boost its stock in the near term.

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9/23/2016 4:02 PM
SU $26.48 Down -0.26 -0.97%
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