Cenovus Energy Q2 Earnings Beat Estimates, Revenues Miss

Cenovus Energy Inc. CVE reported second-quarter 2025 adjusted earnings per share of 33 cents, which beat the Zacks Consensus Estimate of 14 cents. The bottom line, however, declined from the year-ago figure of 39 cents.

Total quarterly revenues of $8.9 billion missed the Zacks Consensus Estimate of $9.1 billion. The top line decreased from the year-ago quarter’s level of $10.9 billion.

Better-than-expected quarterly earnings can be attributed to reduced transportation and blending expenses. However, a significant decline in contributions from major segments partially offset the positives.

Cenovus Energy Inc Price, Consensus and EPS Surprise

Cenovus Energy Inc price-consensus-eps-surprise-chart | Cenovus Energy Inc Quote

Operational Performance

Upstream

The quarterly operating margin from the Oil Sands unit totaled C$1.82 billion, down from C$2.75 billion reported a year ago.

In the June-end quarter, the company recorded daily oil sand production of 577.1 thousand barrels, down 5.4% year over year.

The operating margin at the Conventional unit totaled C$84 million, reflecting an increase of 100% from C$42 million recorded in the year-ago quarter. The company’s daily liquid production was 24.9 thousand barrels compared with 26.5 thousand barrels a year ago. The total Conventional natural gas production from the segment was 569.2 MMcf/d, lower than 579.5 MMcf/d recorded a year ago.

The Offshore segment generated an operating margin of C$231 million, down from C$299 million in the year-ago quarter. Cenovus recorded daily offshore liquid production of 22 thousand barrels, up from 20 thousand barrels recorded a year ago.

The total upstream production in the reported quarter was 765.9 thousand barrels of oil equivalent per day (Mboe/d) compared with 800.8 Mboe/d in the year-earlier quarter.

Downstream

The operating margin from the Canadian Manufacturing unit was C$107 million, which improved year over year from a loss of C$255 million. The segment recorded Crude Oil processed volumes of 112.4 thousand barrels per day (MBbl/D).

The operating margin from the U.S. Refining unit was reported at a loss of C$178 million against a positive operating margin of C$102 million in the prior-year quarter. Crude oil processed volumes totaled 553.4 MBbl/D, down from 568.9 MBbl/D in the year-ago quarter.

Expenses

Transportation and blending expenses decreased to C$2.62 billion from C$3.04 billion recorded a year ago.

Also, expenses for purchased products increased to C$1.1 billion from C$815 million in the prior-year quarter.

Capital Investment & Balance Sheet

Cenovus made a total capital investment of C$1.16 billion in the quarter under review.

As of June 30, 2025, the Canada-based energy player had cash and cash equivalents of C$2.56 billion and a long-term debt of C$7.06 billion.

Guidance

Cenovus provided its full-year 2025 guidance for total upstream production in the band of 805-825 MBoe/d. The midpoint of the range suggests an increase from the 2024 figure of 797.2 MBoe/d.

The company anticipates capital expenditure to be in the band of $4.6-$5 billion for the entire year.

CVE’s Zacks Rank and Key Picks

CVE currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at a couple of better-ranked stocks like Antero Midstream Corporation AM and Enbridge Inc. ENB, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Antero Midstream generates stable cash flow by providing midstream services under long-term contracts with Antero Resources. The company prioritizes debt reduction by effectively utilizing free cash flow after dividends. Antero Midstream’s higher dividend yield compared to its sub-industry peers reflects its commitment to generating shareholder returns.

AM’s earnings beat estimates in one of the trailing four quarters, met once and missed in the other two, delivering an average negative surprise of 5.50%.

Enbridge is a major energy company that owns the longest and most complex oil and gas pipeline system in North America, transporting about 20% of the natural gas used in the United States. The business earns steady fees through long-term contracts, protecting it against big oil price swings or changes in shipment. 

ENB’s earnings beat estimates in two of the trailing four quarters, met once and missed in the other, delivering an average surprise of 0.28%.

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

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