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Cenovus (NYSE:CVE) is within the penalty field after lacking earnings and money move estimates, and struggling to offer a transparent message on the decision. Shares are down 7%+ headed into the shut.
With most analyst questions targeted on the web debt goal and timing of elevated shareholder returns, CEO Pourbaix mentioned “I feel we made very, very clearly, that as we delivered the steadiness sheet, we have been going to more and more take a look at allocating money to returning to our shareholders.” However he additionally had this to say, “our technique as being an operator of refineries, and if we will, after we’re concerned in refineries which can be nice refineries, we’d like to have 100% of it, all issues being equal.” Presumably eluding to the 2 refineries the place Cenovus has a 50/50 non-operating three way partnership with Phillips 66 (NYSE:PSX).
There have been additionally a lot of questions on underlying earnings and money move within the quarter, with Goldman’s Neil Mehta asking concerning the hedging program, and RBC’s Greg Pardy asking about downstream reliability headwinds. In contrast to in quarters previous, Administration selected to not publish a slide deck together with outcomes, forgoing the chance to bridge file manufacturing consequence to underwhelming money move era.
With the Conoco possession promote down close to completion, and Conoco’s price-linked earnout set to run out in Q2, there’s loads of causes to anticipate accelerating money move progress forward. Nonetheless, with administration unable to focus traders on the underlying money move era of the enterprise, and unable to offer a transparent capital allocation framework, Cenovus could battle to outperform Canadian friends within the close to time period.
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