Canadian Natural Q2 Earnings Beat Estimates, Expenses Decrease Y/Y
Total revenues of $6.3 billion decreased from $6.6 billion in the prior-year period, fueled by declined product sales. However, the figure marginally beat the Zacks Consensus Estimate by $5 million.
On Aug. 7, CNQ's board of directors approved its quarterly cash dividend of 58.75 Canadian cents per common share. The dividend will be payable on Oct. 3 to its shareholders of record as of the close of business on Sept. 19, 2025. This marks the company's continued commitment to returning value to its shareholders.
This commitment is further evidenced by CNQ's impressive track record of growing and sustaining its dividend for 25 years, boasting a remarkable 21% annual growth rate over that period.
In the second quarter of 2025, the company returned around C$1.6 billion directly to its shareholders. This included C$1.2 billion in dividends and C$0.4 billion from the repurchase and cancellation of 8.6 million common shares, purchased at a weighted average price of C$41.46 per share.
The oil and gas exploration and production company delivered strong financial results in the second quarter of 2025, highlighted by net earnings of approximately C$2.5 billion. Furthermore, CNQ reported robust adjusted net earnings from operations of approximately C$1.5 billion. This strong performance was also reflected in the company's cash flow. From operating activities, cash flows totaled approximately C$3.1 billion and adjusted funds flow reached approximately C$3.3 billion.
Up to Aug. 6, 2025, the Calgary-based company delivered significant returns to its shareholders, amounting to approximately C$4.6 billion. This total was composed of C$3.6 billion in dividends and C$1 billion through the repurchase and cancellation of 22.4 million common shares.
CNQ's Production & Prices
Canadian Natural reported quarterly production of 1,420,358 barrels of oil equivalent per day (Boe/d), up 10.5% from the prior-year quarter's level. However, the figure missed our model projection of 1,543,882 Boe/d.
The oil and NGL output (accounting for around 75% of total volumes) increased to 1,019,149 barrels per day (Bbl/d) from 934,066 Bbl/d recorded a year ago. However, the figure missed our model projection of 1,137,442 Bbl/d.
Natural gas volumes totaled 2,407 million cubic feet per day (MMcf/d), up 14.1% from 2,110 MMcf/d recorded in the year-ago period. However, the figure missed our model projection of 2,439 MMcf/d.
Natural gas production in North America reached 2,398 MMcf/d in the second quarter of 2025 compared with 2,099 MMcf/d in the second quarter of 2024. However, the figure missed our model projection of 2,426 MMcf/d.
Exploration and production activities in North America, not including thermal in situ methods, reported an average output of 271,022 Bbl/d. This indicates a 17% year-over-year increase during this quarter. Meanwhile, thermal in situ production volume increased to 274,789 Bbl/d from 268,044 Bbl/d recorded a year ago. However, the figure missed our model projection of 291,060 Bbl/d.
The Oil Sands Mining and Upgrading operations in North America reported an average output of 463,808 Bbl/d of synthetic crude oil. This represented a 13% increase from the prior-year quarter levels of 410,518 Bbl/d.
The realized natural gas price increased 62.3% to C$2.58 per thousand cubic feet from the year-ago level of C$1.59. The realized oil and NGL price decreased 19.7% to C$69.58 per barrel from C$86.64 in the second quarter of 2024.
The company also achieved industry-leading annual operating costs for Oil Sands Mining and Upgrading, amounting to C$26.53 per barrel in the second quarter of 2025. Oil Sands Mining and Upgrading continues to outperform expectations, following both the Reliability Enhancement Project at Horizon and the debottlenecking at Athabasca Oil Sands Project, that were completed in 2024.
On recently acquired Duvernay assets, Canadian Natural's effective and efficient operations have resulted in both capital and operating cost efficiencies. Additionally, the company achieved strong operating costs in the Duvernay of $8.43/Boe, a decrease of 11% from year-ago levels of $9.52/Boe.
CNQ's Costs & Capital Expenditure
Total expenses in the quarter were C$5.9 billion, down from C$6.8 billion recorded in the year-ago period. The decrease was mainly caused by lower blending and feedstock expense and foreign exchange gains.
Capital expenditure totaled C$3 billion compared with C$2 billion a year ago.
CNQ's Balance Sheet
As of June 30, 2025, CNQ had cash and cash equivalents worth C$102 million and long-term debt of approximately C$15.7 billion, with a debt to capitalization of about 27.6%.
CNQ's 2025 Guidance
CNQ's capital budget for 2025 remains unchanged at $6.05 billion, excluding abandonments. For 2025, the production target also remains unchanged in the range of 1,510-1,555 thousand barrels of oil equivalent per day.
In July 2025, after ending of the quarter, the company purchased certain producing and non-producing assets within its North America Exploration and Production segment for approximately $750 million, subject to final closing adjustments. This acquisition was not included in the 2025 capital budget.
CNQ currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Important Earnings at a Glance
While we have discussed CNQ's second-quarter results in detail, let us take a look at three other key reports in this space.
Alberta, Canada-based integrated energy company, 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 upstream and downstream segments. However, the top line decreased approximately 9.8% year over year.
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%.
Calgary, Canada-basedintegrated oil company, 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, 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%.
Calgary, Canada-based vertically integrated operator of energy infrastructure assets, Pembina Pipeline Corporation PBA, reported second-quarter 2025 earnings per share of 47 cents, which was in line with the Zacks Consensus Estimate. The bottom line decreased from the year-ago quarter's level of 55 cents. This decrease was primarily due to an asset retirement at the Redwater Complex, lower profit from PGI and lower other income.
Quarterly revenues of $1.3 billion decreased about 4.5% year over year. The metric also missed the Zacks Consensus Estimate of $1.6 billion significantly.
As of June 30, 2025, PBA had cash and cash equivalents worth C$210 million and C$12.7 billion in long-term debt. Debt-to-capitalization was 42.8%.
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