Canadian Natural Resources Limited CNQ is set to release fourth-quarter results on March 6. The Zacks Consensus Estimate for earnings is pegged at 69 cents per share on revenues of $6.39 billion.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Let us delve into the factors that might have influenced CNQ’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 CNQ’s Q3 Earnings & Surprise History

In the last reported quarter, the Calgary-based oil and gas equipment and services company beat the consensus mark on decreased year-over-year expenses. CNQ reported adjusted earnings per share of 71 cents, surpassing the Zacks Consensus Estimate of 69 cents. Total revenues of $6.5 billion beat the Zacks Consensus Estimate by 1.9%. CNQ’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters and missed in the other one, delivering an average surprise of 3.87%. This is depicted in the chart below:

Canadian Natural Resources Limited Price and EPS Surprise

Canadian Natural Resources Limited price-eps-surprise | Canadian Natural Resources Limited Quote

Trend in CNQ’s Estimate Revision

The Zacks Consensus Estimate for fourth-quarter fiscal 2024 earnings has not witnessed any movement in the past seven days. The estimated figure indicates a 19.77% year-over-year decrease. The Zacks Consensus Estimate for revenues implies an 8.92% decrease from the year-ago period.

Factors to Consider Ahead of CNQ’s Q4 Results

CNQ makes money by finding and producing oil and gas, which it sells to other companies. It also owns pipelines to move the oil and gas around. The company has a varied range of products, including heavy and light crude oil, natural gas, bitumen and synthetic-crude oil. CNQ’s core operations are focused in Western Canada, the United Kingdom’s sector of the North Sea and offshore Africa, which includes Côte d’Ivoire, Gabon and South Africa.

CNQ’s revenues are likely to have suffered in the quarter to be reported. Our model predicts fourth-quarter revenues to have decreased to $6,247.5 million from the year-ago quarter’s level of $7,018 million. This can be attributed to the poor performance of the Exploration and Production segments.

North America’s revenues are expected to have decreased 15.7% year over year, totaling C$3,735.5 million, while the North Sea’s revenues are predicted to have decreased 16.2% at the same time, amounting to C$138.2 million.  On the other hand, Oil Sands Mining and Upgrading’s revenues are expected to have decreased 7.3% year over year, totaling C$4,190.9 million.

Turning to the cost side, CNQ's cost-reduction initiatives are anticipated to have positively impacted its bottom line. We expect the company’s total expenses to have reached C$6,386.5 million in the fourth quarter, which is 3.2% down from the year-ago quarter’s level of C$6,595 million.

Moreover, total depletion, depreciation and amortization expenses are forecasted to have significantly decreased to C$1,382.6 million, representing a 32.3% drop. In contrast, administration expenses are expected to have seen a more modest decline, reaching C$118.5 million, a 0.5% decrease from the year-ago quarter.

What Does Our Model Predict for CNQ?

The proven Zacks model does not conclusively show an earnings beat for CNQ this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here.

Earnings ESP of CNQ: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -7.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CNQ’s Zacks Rank: CNQ currently carries a Zacks Rank #3.

Stocks to Consider

Here are some firms from the other space that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.

Auna S.A. AUNA has an Earnings ESP of +26.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is set to release its earnings on March 10. Despite a substantial valuation of approximately $637.91 billion, AUNA’s shares have experienced a 5.1% decline in the past year. Auna S.A. operates as a healthcare company, focusing its services primarily in Mexico, Peru and Colombia. Furthermore, Auna S.A. is headquartered in LUXEMBOURG.

Similarly, Franco-Nevada FNV has an Earnings ESP of +1.23% and a Zacks Rank #3. However, in contrast to AUNA’s share performance, FNV’s shares have seen a significant gain of 27.9% in the past year, with a valuation around $27.52 billion.

FNV is scheduled to release earnings on March 10. Notably, Toronto, Canada-based Franco-Nevada functions as a gold-focused royalty and stream company while maintaining interests in silver, platinum group metals, oil & gas, and other resource assets.

Finally, Gaia GAIA has an Earnings ESP of +25.00% and a Zacks Rank #3. Gaia is scheduled to release earnings on March 10.

Gaia is valued at around $110.53 million and its shares have gained 49% in a year. Gaia provides a digital video subscription service and its video content is accessible through online digital streaming on virtually any Internet-connected device on a commercial-free basis.

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Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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