Suncor Energy Q2 Earnings & Revenues Beat Estimates, Both Down Y/Y

Globe and Mail

6 days ago

Suncor Energy Inc. SU reported second-quarter 2025 adjusted operating earnings of 51 cents per share, which marginally beat the Zacks Consensus Estimate of 50 cents. This outperformance can be attributed to strong production growth in its upstream segment. However, the bottom line declined considerably from the year-ago quarter's reported figure of 93 cents due to lower adjusted operating earnings in the downstream segment.
Operating revenues of $8.6 billion beat the Zacks Consensus Estimate by 11.3% primarily due to increased sales volumes in both the upstream and downstream segments. However, the top line decreased approximately 9.8% year over year.
Suncor Energy's board of directors declared a quarterly dividend of 57 Canadian cents per share for its common shareholders of record as of Sept. 4, 2025. The payout, which is unchanged from the previous quarter, will be made on Sept. 25.
During the quarter, the Alberta-based integrated energy company distributed a total of C$1.45 billion to its shareholders, including C$750 million in share repurchases and C$700 million in dividends. The company generated C$2.7 billion in adjusted funds from operations and C$1 billion in free cash flow in the quarter.
In the quarter under discussion, the company achieved a record upstream production of 808,100 barrels per day (bbls/d). Refining throughput was also near-record, totaling 442,000 bbls/d with refinery utilization at 95%. The company recorded the refined product sales of 600,500 bbls/d, increasing from the prior-year sales of 594,700 bbls/d.
Segmental Performance of SU
Upstream: Total production in this segment increased 4.9% year over year from 770,600 bbls/d. Moreover, the figure beat the consensus estimate of 791,000 bbls/d.
In the second quarter of 2025, total oil sands bitumen production increased to 860,800 bbls/d compared with 834,400 bbls/d in the previous-year quarter. This growth was primarily fueled by record output at Firebag.
The company's E&P volume (international, offshore and natural gas) increased 9.3% to 59,700 bbls/d from 54,600 bbls/d in the year-ago quarter, driven by increased production at Hebron and the addition of production at White Rose, which restarted in the first quarter of 2025. Additionally, the figure beat the consensus estimate of 54,000 bbls/d.
Operating earnings totaled C$873 million, indicating a 46.3% decrease from the year-ago quarter's C$1.6 billion due to lower upstream price realizations.
Operating costs from Oil Sands operations decreased to C$27.95 per barrel from C$28.45 in the corresponding period of 2024. This decrease was mainly due to a lower proportion of Fort Hills bitumen being directed to upgrading at Oil Sands Base due to planned maintenance and increased power sales volumes. Total oil sands production rose to 748,400 bbls/d in the second quarter of 2025, up from 716,000 bbls/d in the previous year. Moreover, the figure beat the consensus estimate of 731,000 bbls/d.
Non-upgraded bitumen production rose to 310,200 bbls/d from 254,300 bbls/d in the previous year. Moreover, the figure beat the consensus estimate of 266,000 bbls/d. Net SCO and diesel production decreased to 438,200 bbls/d from 461,700 bbls/d a year earlier. Additionally, the number missed the consensus estimate of 465,000 bbls/d.
Fort Hills reported an average second-quarter volume of 162,900 barrels per day (bpd), lower than the year-ago quarter's level of 166,900 bpd. However, the figure beat the consensus estimate of 157,000 bpd. The Fort Hills cash operating cost per barrel increased to C$36.75 from C$30.60 in the prior-year period. This was due to increased mining activities and commodity costs, and decreased production volumes due to a longer planned maintenance program in the current year.
Furthermore, Syncrude's cash operating costs per barrel decreased to C$36.50 from C$40.15 in the same quarter last year. This decrease was mainly caused by increased production volumes.
The oil sands base upgrader operated at 80% capacity and Syncrude achieved a record 91%, compared with 92% and 81%, respectively, in the prior-year quarter. This was primarily due to increased upgrader-related maintenance activities in the current period, including the Upgrader 1 coke drum replacement project and turnaround.
Downstream: Refining and Marketing adjusted operating earnings for the second quarter of 2025 were C$404 million, down from C$588 million in the same quarter last year. The decline in adjusted operating earnings was mainly due to a first-in, first-out inventory valuation loss and a one-time emissions compliance charge in the reported quarter.
Refined product sales totaled 600,500 bpd, up from the prior-year quarter's level of 594,700 bpd. This growth was driven by higher refinery throughput and the execution of the previously announced retail growth plan.
Refinery crude throughput totaled 442,300 bpd compared with 430,500 bpd in the year-ago period. Additionally, the number beat the consensus estimate of 397,000 bpd.
Refinery utilization was 95% compared with 92% a year ago. This increase in refinery crude throughput was due to strong operating performance.
SU's Financial Position
Total expenses decreased 3.7% to C$10.5 billion from the prior-year quarter. Operating, selling and general expenses almost remained consistent at C$3.163 billion in the second quarter of 2025, compared with C$3.153 billion in the prior-year quarter, as higher commodity input costs and increased mining costs were largely offset by decreased share-based compensation expense.
Cash flow from operating activities amounted to C$2.9 billion, down from the prior-year quarter's level of C$3.8 billion. Suncor Energy incurred capital expenditures worth C$1.6 billion in the second quarter of 2025.
As of June 30, 2025, the company had cash and cash equivalents of C$2.3 billion and long-term debt of C$8.6 billion. Its debt-to-capitalization was 16.1%.
2025 Guidance of Suncor Energy
On Aug. 5, SU issued an updated guidance for 2025 by reducing full-year estimated capital spend from C$6.1-C$6.3 billion to C$5.7-C$5.9 billion. Estimated ranges for current income taxes, royalties and business environment have also been adjusted to reflect the current business environment.
The company expects the other guidance previously released on Dec. 12, 2024, to remain unchanged as follows:
It expects upstream production to range from 810,000 boe/d to 840,000 boe/d for 2025. This includes upgraded net SCO and diesel production, which is predicted to be between 485,000 boe/d and 495,000 boe/d, along with non-upgraded bitumen production expected to fall between 280,000 boe/d and 290,000 boe/d.
Oil Sands Operations production is anticipated to range from 445,000 boe/d to 470,000 boe/d, with Fort Hills contributing in the band of 165,000 boe/d to 175,000 boe/d and Syncrude (58.74% working interest) expected to produce between 190,000 boe/d and 200,000 boe/d. Additionally, E&P production is forecasted in the range of 45,000-55,000 boe/d.
On the other hand, the company expects cash operating costs for its Oil Sands operations in the range of C$26-C$29 per barrel. Specifically, cash operating costs for Fort Hills are expected in the band of C$33-C$36 per barrel, while costs for Syncrude are anticipated in the range of C$34-C$37.
The company expects refinery throughput to be between 435,000 bpd and 50,000 bpd, refinery utilization in the band of 93-97% and refined product sales in the range of 555,000-585,000 barrels per day.
SU currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Important Energy Earnings so far
While we have discussed Suncor Energy's second-quarter results in detail, let us take a look at some other key energy reports of this season.
Coterra Energy Inc. CTRA reported second-quarter 2025 adjusted earnings per share of 48 cents, which beat the Zacks Consensus Estimate of 43 cents. The bottom line also outperformed the year-ago quarter's 37 cents. This was largely attributed to stronger-than-expected operational performance, particularly in oil and natural gas production volumes.
This oil and gas exploration and production firm's operating revenues of $2 billion beat the Zacks Consensus Estimate of $1.7 billion. Moreover, the figure was outstandingly higher than the year-ago figure of $1.3 billion. This can be attributed to higher natural gas price realizations.
As of June 30, 2025, the company had $192 million in cash and cash equivalents with no debt outstanding under its $2 billion revolving credit facility. This resulted in the company's total liquidity of about $2.2 billion. Coterra Energy had a long-term debt (net) of $4.2 billion as of the same date, indicating a debt-to-capitalization of 22.3%.
Imperial Oil Limited IMO reported second-quarter 2025 adjusted earnings per share of $1.34, which beat the Zacks Consensus Estimate of $1.22. However, the bottom line decreased from the year-ago quarter's $1.54. This decrease was due to lower upstream price realizations, partly offset by higher production volumes.
Revenues of $8.1 billion missed the Zacks Consensus Estimate of $10.5 billion. The top line also decreased from the year-ago quarter's level of $9.8 billion, primarily due to weak performance in the Chemical segment.
As of June 30, 2025, Imperial Oil had cash and cash equivalents of C$2.4 billion. Total debt of the company amounted to C$4 billion, with a debt-to-capitalization of 13.8%.
TC Energy Corporation TRP reported second-quarter 2025 adjusted earnings of 59 cents per share, which beat the Zacks Consensus Estimate of 56 cents. This can be attributed to the better performance of all four segments of the company. However, the bottom line decreased from 69 cents in the year-ago period.
This energy infrastructure provider's quarterly revenues of $2.7 billion also beat the Zacks Consensus Estimate of $2.5 billion. However, the figure decreased 9.4% year over year.
As of June 30, 2025, TC Energy's capital investments amounted to C$1.4 billion. TRP had cash and cash equivalents worth C$1.4 billion and long-term debt of C$43.3 billion, with a debt-to-capitalization of 59% as of the same date.
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Suncor Energy Inc. (SU): Free Stock Analysis Report
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