(Reuters) - Suncor Energy (SU.TO), Canada’s top oil producer and refiner, raised its quarterly dividend and reported first-quarter operating profit that topped forecasts, driven largely by better-than-expected production results.
Although upstream production fell 6.5 percent from year-ago levels, Calgary-based Suncor’s average output of 562,300 barrels per day in the quarter beat Wall Street’s average estimate of roughly 551,000 barrels per day.
“We view the results and dividend increase as positive and expect the stock to react accordingly,” National Bank analyst Kyle Preston said in a note to clients. “We would have liked to have seen a slightly larger dividend increase but note this is at least a step in the right direction.”
The company late on Monday announced an 18 percent increase in its quarterly dividend, to 13 Canadian cents a share from 11 Canadian cents.
Suncor said weaker production volumes and higher royalties sent its operating profit down 10 percent to C$1.33 billion, or 85 Canadian cents per share. But the per-share results topped analysts’ average forecast by 4 Canadian cents, according to Thomson Reuters I/B/E/S.
Year-earlier operating profit was C$1.48 billion, or 94 Canadian cents.
Cash flow, a key indicator of the company’s ability to fund new projects, rose 1.4 percent in the quarter to C$2.43 billion, or C$1.55 per share, from C$2.39 billion, or C$1.52, a year earlier.
Net income rose to C$1.46 billion, or 93 Canadian cents, from C$1.03 billion, or 65 Canadian cents, a year earlier, lifted by higher average oil prices.
Suncor, the dominant producer in the tar sands of northern Alberta, said quarterly operating revenue rose almost 8 percent to C$9.65 billion on the back of higher average oil prices.
Suncor shares rose almost 1 percent to $33.35 in premarket trading in the United States.
Reporting By Euan Rocha; editing by John Wallace