Q: Thoughts on earnings ? Thank you.
5i Research Answer:
SU reported a solid quarter and is now trading at 7.9x times' Forward P/E. In the 3Q, SU’s revenue grew 20% to $902.6M, beating estimates of $548M, and EPS was $1.52, beating estimates of $1.34. The result was decent enough given last year’s tough comparison of record-high oil prices. Production in the quarter was also down from 724 barrels/day to 690 barrels/day. The balance sheet is solid, with net debt of $13B and net debt/EBITDA of 0.6x. The company also returned $1B to shareholders (around 2/3 in dividends and 1/3 in share buyback). Overall, we like to see strong capital returns from energy names, and we like SU given its cheap valuation, strong capital returns, and solid balance sheet.