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Canadian Natural Q3 profit beats, revenue misses

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Canadian Natural Resources (TSE:CNQ), an oil and natural gas production company, reported an 11 percent drop in third-quarter profit, hurt by weaker realized prices for crude oil.

Net income slipped to C$1.04 billion, or C$0.94 per share, in the July-to-September quarter, from C$1.17 billion, or C$1.07 per share, a year earlier, the Calgary, Alberta-based company said in a statement today. Spot prices for Canadian heavy crude fell 5.3 percent to average $78.69 a barrel in the third quarter,

Excluding one-time items, adjusted profit from operations declined 2.5 percent to C$984 million, or C$0.89 per share. Analysts on average expected earnings per share of C$0.75.

Revenue, however, increased to C$4.71 billion from C$4.65 billion, while analysts predicted revenue of C$4.92 billion.

Cash flow from operations, a key indicator of a company’s ability to pay for new projects and drilling, slid marginally to C$2.44 billion, or C$2.21 per share.

The company, which is focused in Western Canada, the North Sea and offshore West Africa, said that its oil and gas production increased 13 percent to 796,931 boepd. The increase came even as it had a 25-day halt in output from the Horizon project to accommodate work to expand production. Canadian Natural is seeking to more than double synthetic crude output from the project to 250,000 barrels a day and may bring it to 500,000 barrels a day.

The company said expansion of its Horizon project in Northern Alberta was on schedule and within its original cost estimates.

Canadian Natural plans to spend C$8.6 billion in the next year, compared with its targeted budget of C$7.7 billion for the current year.

"Our strong balance sheet enables us to weather volatility in commodity prices and our 2015 capital program is balanced and flexible, enabling us to allocate capital to the projects with the highest returns," the company’s president Steve Laut said in a separate statement.

Also today, the company declared a quarterly cash dividend of C$0.225 per share, payable on January 1.

Shares closed up 4 percent at C$38.26 in Toronto yesterday, expanding gains over the past year to 17 percent.

 

 

Quick facts: Canadian Natural Resources Limited

Price: 19.06 CAD

TSX:CNQ
Market: TSX
Market Cap: $22.51 billion
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