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Suncor Energy Inc. (USA) (NYSE:SU) Discovers New Way To Profit

Boston, MA 05/05/2014 (wallstreetpr) – Suncor Energy Inc. (USA) (NYSE:SU)’s Q12014 benefited a great deal from the higher prices of oil and natural gas in the wake of a weaker Canadian dollar. But beyond that, the company also found a path to improve its bottom-line in the quarter.

While the challenge of getting cheaper Canadian oil to customers in the U.S. can be pinching at times, it was not much of a challenge for Suncor in Q1. Suncor Energy Inc. (USA) (NYSE:SU)’s combination of rail and pipeline transportation not only helped it to circumvent the pipeline restrictions, but also increased its sales and kept expenses low, therefore, supporting profit growth.

Due to the favorable transportation environment the company in Q1 captured global pricing of 96 percent of its production. That column was 88 percent last year.

Rail pipeline combination

Suncor Energy Inc. (USA) (NYSE:SU) expects to benefit from a combination of rail and pipeline in getting its products to customers in the U.S. As such, the company believes that 2014 will turn out to be a very positive year characterized with reduced costs and expenses and higher profits. Moreover, the company expects demand for its products to remain high for the balance of the year given the price advantage that it enjoys because of the cheap production environment in Canada.

Q1 in numbers

Suncor Energy Inc. (USA) (NYSE:SU) realized earnings per share of $1.01 in Q1. That compared with 72 cents in Q12013. Operating earnings in the latest quarter were $1.22 per share, exceeding the analysts’ estimate of 97 cents per share for the quarter. The use of a variety of transportation channels helped to support the strong quarter earnings.

In conclusion

Even with the benefit of a variety of transportation options, Suncor Energy Inc. (USA) (NYSE:SU) expects to continue its cost-cutting efforts to support bottom-line and save money that can be returned to shareholders in dividend or stock repurchase.

Shares of Suncor Energy Inc. (USA) (NYSE:SU) jumped to a new 52-week high of $39.35 on Friday, based on the strong prospects and the solid Q1 earnings.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (https://plus.google.com/103338576216002376250).



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