Why Is Cabot (CTRA) Up 2.1% Since Last Earnings Report?

It has been about a month since the last earnings report for Coterra Energy (CTRA). Shares have added about 2.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Cabot due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Coterra Q3 Earnings Miss Estimates, Revenues Beat, Expenses Rise Y/Y

Coterra Energyreported 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.

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.

Production & Price Realizations

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.

Costs & Expenses

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.

Financial Position                           

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%.

Guidance

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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -5.3% due to these changes.

VGM Scores

At this time, Cabot has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Interestingly, Cabot has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Cabot is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Cheniere Energy (LNG), a stock from the same industry, has gained 1.2%. The company reported its results for the quarter ended September 2025 more than a month ago.

Cheniere Energy reported revenues of $4.44 billion in the last reported quarter, representing a year-over-year change of +18%. EPS of $4.75 for the same period compares with $3.93 a year ago.

Cheniere Energy is expected to post earnings of $3.93 per share for the current quarter, representing a year-over-year change of -9.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +8.1%.

Cheniere Energy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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