Suncor Energy Q4 Profit Falls - Quick Facts

(RTTNews) - Suncor Energy Inc. (SU.TO, SU) reported that its net earnings for the fourth quarter of 2014 declined to C$84 million and C$0.06 per share from C$443 million and C$0.30 per share for the prior year quarter.

Net earnings for the fourth quarter of 2014 were impacted by the same factors that influenced operating earnings and also included the impact of an after-tax foreign exchange loss on the revaluation of U.S. dollar denominated debt of C$302 million, compared to an after-tax foreign exchange loss of C$259 million in the prior year quarter. In comparison, net earnings for the fourth quarter of 2013 included after-tax impairment charges, net of related provisions, of C$340 million against assets in Exploration and Production and an after-tax recovery of C$69 million related to the decision to not proceed with the Voyageur upgrader project.

Quarterly operating earnings were C$386 million and C$0.27 per share compared to C$973 million and C$0.66 per share in the prior year quarter, reflecting a significantly lower crude price environment. Analysts polled by Thomson Reuters expected the company to report earnings of C$0.35 per share. Analysts' estimates typically exclude special items.

The decrease in operating earnings from the prior year quarter was driven by significantly lower upstream benchmark prices and a less favourable downstream business environment, partially offset by favourable foreign exchange rates. The decrease was also due to lower production volumes at Oil Sands Base operations, partially offset by higher Oil Sands In Situ production, higher production in Exploration and Production, due in part to the temporary ramp up of production in Libya, which has since been substantially shut in by the end of the fourth quarter and a recovery in share-based compensation expense.

Suncor Energy's Board has approved a quarterly dividend of C$0.28 per share on its common shares, payable March 25, 2015 to shareholders of record at the close of business on March 4, 2015.

The company has reduced its 2015 guidance by C$1 billion in its capital spending program to C$6.2 billion to C$6.8 billion, as well as implemented plans to reduce operating expenses by C$600 million to C$800 million over two years. As a result, Suncor will defer some projects that have not been sanctioned, without impacting projects critical to the company's continued safety, reliability and environmental performance.