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Coterra Energy Inc. CTRA reported third-quarter 2025 adjusted earnings per share of 39 cents, which missed the Zacks Consensus Estimate of 41 cents. The underperformance was due to weaker oil and NGL realizations and a 30.1% increase in operating expenses. However, the bottom line increased from the year-ago quarter’s 30 cents. This was largely attributed to stronger-than-expected operational performance, particularly in daily oil and NGL production volumes.
The oil and gas exploration and production firm’s operating revenues of $1.8 billion beat the Zacks Consensus Estimate by $60 million. The outperformance was driven by stronger-than-expected oil, NGL and other revenues, which surpassed our respective estimates of $980 million, $211 million and $24.5 million. However, the figure decreased 33.7% from the year-ago level, mainly due to lower year-over-year contributions from gains on derivative instruments.
Coterra Energy Inc. price-consensus-eps-surprise-chart | Coterra Energy Inc. Quote
In a positive move for investors, Coterra's board of directors declared a quarterly cash dividend of 22 cents per share to its common shareholders of record on Nov. 13. The payout, which is unchanged from the previous quarter, will be made on Nov. 26, 2025.
CTRA delivered $504 million in cash dividends for the year, driving total shareholder returns to nearly $551 million through September 2025. As of Sept. 30, 2025, $1.1 billion was still available under the company’s $2 billion stock buyback plan. The Houston, TX-based independent oil and gas company paused repurchases in the third quarter to focus on reducing term loan debt but restarted the program in October and expects to continue making opportunistic share buybacks through the fourth quarter.
So far this year, after distributing its base dividend, the company focused on cutting debt, paying down $600 million of the $1 billion in term loans tied to its Delaware Basin acquisition earlier in the year.
The average third-quarter daily production increased 17.3% from the year-ago level to 785 thousand barrels of oil equivalent (Mboe). Additionally, the figure surpassed the Zacks Consensus Estimate of 781 Mboe.
Turning to specific production types, oil production rose 50.3% to 166.8 thousand barrels (MBbl) per day. Moreover, the figure marginally beat the Zacks Consensus Estimate of 166 MBbl per day. The daily production of natural gas decreased 7.3% year over year to 2,894.6 million cubic feet (Mmcf) per day. Moreover, the figure came below the Zacks Consensus Estimate of 2,908 Mmcf per day. On the other end, natural gas liquids (“NGL”) production increased 23.8% to 135.8 MBbl per day in the quarter under review. The figure also beat the Zacks Consensus Estimate of 131 MBbl per day.
Regarding pricing, the average sales price for crude oil was $64.10 per barrel, indicating a 13.4% decrease from the prior-year level of $74.04. The figure was in line with the Zacks Consensus Estimate.
The average realized natural gas price was $1.95 per thousand cubic feet compared with $1.30 in the year-earlier period. Moreover, the figure slightly surpassed the consensus estimate of $1.94 per thousand cubic feet.
The average realized NGL was $17.02 per barrel compared with $18.42 in the year-earlier period. The figure marginally missed the Zacks Consensus Estimate of $17.76 per barrel.
In the quarter under discussion, the average unit cost rose to $19.33 per barrel of oil equivalent from the previous year's $16.96. This increase was caused by higher per-barrel costs, including a 10.3% rise in depreciation, depletion and amortization expenses, a 41.3% jump in direct operations expenses and a 19.4% increase in taxes other than income.
Additionally, total operating expenses of $1,347 million increased from the year-ago quarter’s $1,035 million.
Cash flow from operations went up 28.6% to $971 million, while CTRA’s cash capital expenditure for drilling, completion and other fixed asset additions totaled $658 million. The company’s free cash flow for the quarter amounted to $533 million.
As of Sept. 30, 2025, the company had $98 million in cash and cash equivalents with no debt outstanding under its $2 billion revolving credit facility. This resulted in the company’s total liquidity of about $2.1 billion. Coterra had a long-term debt (net) of $4.2 billion as of the same date, indicating a debt-to-capitalization of 20%.
Coterra expects 2025 incurred capital expenditures (non-GAAP) of roughly $2.3 billion, and alongside this disciplined investment approach, it has lifted the full-year outlook, now projecting total equivalent production volumes of 772-782 thousand barrels of oil equivalent per day (Mboepd), natural gas output of 2,925-2,965 million cubic feet per day (MMcfpd) and a narrowed oil range of 159-161 thousand barrels of oil per day (Mbopd).
In addition, Coterra has outlined fourth-quarter 2025 guidance that points to continued operational strength, calling for total equivalent production of 770-810 Mboepd, oil volumes of 172-178 Mbopd, natural gas production of 2,775-2,925 MMcfpd and approximately $530 million in capital spending (non-GAAP), while also reaffirming a full-year effective tax rate of 22% and expecting no cash taxes in the final quarter.
CTRA currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
While we have discussed CTRA’s third-quarter results in detail, let us take a look at three other key reports in this space.
Liberty Energy Inc. LBRT, a leading pressure pumping and oilfield services firm headquartered in Denver, posted a third-quarter 2025 adjusted net loss of 6 cents per share, wider than the Zacks Consensus Estimate of a loss of 1 cent. Moreover, the bottom line decreased sharply from the year-ago quarter’s profit of 45 cents. The company's underperformance can be attributed to macroeconomic headwinds accompanied by a slowdown in the industry’s frac activity and market pricing pressure.
As of Sept. 30, Liberty Energy had approximately $13.4 million in cash and cash equivalents. The pressure pumper’s long-term debt of $253 million represented a debt-to-capitalization of 10.9%.
San Antonio-based Valero Energy Corporation VLO, a leading independent refiner and marketer of transportation fuels and petrochemical products, reported third-quarter 2025 adjusted earnings of $3.66 per share, which beat the Zacks Consensus Estimate of $2.95. The bottom line improved from the year-ago quarter’s level of $1.16. Better-than-expected quarterly results can be primarily attributed to an increase in refining margins, higher ethanol margins and lower total cost of sales.
The company had cash and cash equivalents of $4.8 billion at the end of the third quarter. As of Sept. 30, 2025, it had a total debt of $8.4 billion and finance-lease obligations of $2.2 billion.
Houston-based Halliburton Company HAL, one of the world’s largest oilfield services providers specializing in drilling and well completions, posted third-quarter 2025 adjusted net income per share of 58 cents, beating the Zacks Consensus Estimate of 50 cents. The outperformance primarily reflects successful cost reduction initiatives. However, the bottom line fell from the year-ago adjusted profit of 73 cents due to softer activity in North America.
As of Sept. 30, 2025, the company had approximately $2 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 41.1.
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This article originally published on Zacks Investment Research (zacks.com).
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