What to Expect When Canadian Natural Resource (CNQ) Issues Earnings Results Tomorrow

Canadian Natural Resource (CNQ) is scheduled to release its fourth quarter 2014 earnings results before the market open on Thursday.
By Amanda Schiavo ,

NEW YORK (TheStreet) -- Canadian Natural Resource Ltd. (CNQ) - Get Report is scheduled to release its fourth quarter 2014 earnings results before the market open on Thursday morning.

Analysts are expecting the energy company, which is involved in the acquisition, exploration, development, production, marketing, and sale of crude oil, NGLs, and natural gas, to post a year-over-year increase in earnings per share for the most recent quarter.

Canadian Natural Resources has been forecast to report earnings of 71 cents per share. Last year the company said its 2013 fourth quarter adjusted net earnings from operations were 52 cents per diluted share.

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Shares of Canadian Natural Resource are falling by 2.27% to $28.90 in late morning trading on Wednesday. One factor driving the stock into the red today is the decline in oil prices.

Crude oil (WTI) is lower by 1.41% to $49.81 per barrel and Brent crude is slumping by 2.02% to $59.79 per barrel this morning, according to the index provided by CNBC.com.

Oil prices are down after data from the Energy Information Administration showed U.S. stockpiles grew by 10.3 million barrels to 444.4 million barrels for the week that ended February 27.

Separately, TheStreet Ratings team rates CANADIAN NATURAL RESOURCES as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CANADIAN NATURAL RESOURCES (CNQ) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 18.7%. Since the same quarter one year prior, revenues slightly increased by 1.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.34 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CANADIAN NATURAL RESOURCES's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, CNQ has underperformed the S&P 500 Index, declining 19.50% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • You can view the full analysis from the report here: CNQ Ratings Report
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