The 45% net earnings decline and 2.4% revenue drop overshadow record production and dividend growth. Monitor the LNG embedded derivative liability ($369 million) and share-based compensation volatility. The company's net debt increased sequentially despite strong cash flow, and the free cash flow fell to $875 million from $1.855 billion YoY. Watch for Q2 production impact from the Jackfish turnaround and Baobab FPSO maintenance return.
Price Chart
Executive Summary
Canadian Natural Resources reported Q1 2026 results with net earnings of $1.348 billion (down 45% YoY from $2.458 billion) and adjusted net earnings from operations of $2.446 billion (roughly flat vs $2.436 billion YoY). Revenue declined 2.4% to $12.404 billion from $12.712 billion, driven by lower realized crude oil and SCO pricing. Production grew 4% YoY to a record 1,643,160 BOE/d, but the headline earnings decline and revenue drop make this a bearish report despite operational strength.
Key Facts
- Net earnings of $1.348 billion, down 45% from $2.458 billion in Q1 2025
- Revenue of $12.404 billion, down 2.4% from $12.712 billion in Q1 2025
- Adjusted net earnings from operations of $2.446 billion, roughly flat vs $2.436 billion YoY
- Adjusted funds flow of $4.374 billion, down 3.4% from $4.530 billion YoY
- Total production of 1,643,160 BOE/d, up 4% YoY with record North America EP conventional production
- Realized crude oil and NGLs price of $76.02/bbl, down 5% from $79.85/bbl YoY
- Realized SCO price of $89.68/bbl, down 6% from $95.52/bbl YoY
- Share-based compensation expense of $644 million vs $26 million YoY, driven by share price changes
- Unrealized risk management loss of $316 million, primarily from a long-term LNG embedded derivative
- Net debt of $16.153 billion, up from $15.944 billion at year-end 2025
- Quarterly dividend increased 6% to $0.625/share; $1.5 billion returned to shareholders in Q1
Financial Impact
Revenue declined $308 million YoY; net earnings fell $1.11 billion; adjusted funds flow down $156 million; share-based compensation surged $618 million; unrealized risk management loss of $316 million
Risk Factors
- Declining realized crude oil and SCO pricing (-5% and -6% YoY respectively) compressing margins
- Large non-cash charges: $644 million share-based compensation and $316 million unrealized risk management loss
- Net debt increased to $16.153 billion from $15.944 billion at year-end despite $3.282 billion operating cash flow
- International production down 61% YoY due to planned maintenance and decommissioning
- Oil Sands Mining & Upgrading production expense up 8% YoY to $23.73/bbl
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001017413-26-000024 |
| Document: a03312026q1fs.htm | 0001017413-26-000024 |
| Document: a03312026q1pressrelease.htm | 0001017413-26-000024 |
| Document: a033120266-kcover.htm | 0001017413-26-000024 |
| Document: 0001017413-26-000024-index-headers.html | 0001017413-26-000024 |
| Document: 0001017413-26-000024-index.html | 0001017413-26-000024 |
| Document: 0001017413-26-000024.txt | 0001017413-26-000024 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 6, 2026 8w ago | 6-K | $45.51 $50.46 | ▲ +10.88% | ▲ +11.27% | $48.44 (+6.44%) |
May 12, 2026 20w ago | 6-K | $47.20 $45.44 | ▼ −3.73% | ▼ −3.12% | $48.44 (+2.63%) |
May 7, 2026 21w ago | 6-K | $44.53 $45.70 | ▲ +2.63% | ▲ +2.60% | $48.44 (+8.78%) |
May 7, 2026 21w ago | 6-K | $44.53 $45.70 | ▼ −2.63% | ▼ −2.60% | $48.44 (−8.78%) |
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