Diamondback Energy Q4 Earnings Preview: Another Beat Likely?

Diamondback Energy FANG is set to release fourth-quarter 2025 results on Feb. 23. The Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.88 per share on revenues of $3.2 billion.

Let’s delve into the factors that might have influenced the Permian-focused oil and gas producer’s performance in the December quarter. But it’s worth taking a look at FANG’s previous-quarter performance first.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, this Midland, TX-based upstream player beat the consensus mark on higher-than-expected production and lower cash operating costs. Diamondback had reported adjusted earnings per share of $3.08 for the third quarter, surpassing the Zacks Consensus Estimate of $2.85. Revenues of $3.9 billion also topped the consensus estimate by 13.4%.

FANG beat the Zacks Consensus Estimate in each of the last four quarters. This is depicted in the graph below:

Diamondback Energy, Inc. Price and EPS Surprise

Diamondback Energy, Inc. price-eps-surprise | Diamondback Energy, Inc. Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the fourth-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 48.4% decline year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 14.8% decrease from the year-ago period.

Factors to Consider

Diamondback is sitting on more than 850,000 net acres in the Delaware and Midland regions, with nearly 9.600 drilling locations and production of more than 900,000 barrels of oil equivalent per day. Overall, the wells drilled by the company have extremely low oil price breakeven costs and need the commodity to be less than $40 a barrel to be profitable. In particular, Diamondback’s $26 billion Endeavor Energy acquisition significantly strengthens its Permian Basin position. The deal provides access to high-quality acreage with lower production costs.

With its high-quality inventory and best-in-class execution, Diamondback Energy is expected to have benefited from higher production during the fourth quarter. The company continues to churn out impressive volumes from its wide inventory of drill-ready locations in the Permian Basin — America's hottest and lowest-cost shale region. Consequently, our expectation for FANG’s average fourth-quarter volume is pegged at 947,927.5 barrels of oil equivalent per day (BOE/d), up 7.3% from the year-ago quarter’s level of 883,424.0 BOE/d.

Even in a softer pricing environment, Diamondback has expanded free cash flow per share by 15% during the first nine months of 2025 while oil prices declined 14%. The company is operating with a reinvestment rate of roughly 36% at about $63 oil, reflecting tight capital discipline. Lower well costs, faster drilling times, and efficiency gains such as continuous pumping are reinforcing returns. This combination of restrained spending and operational improvements might have positioned the company to convert fourth-quarter production gains into stronger earnings and cash generation.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for Diamondback Energy this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That is the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

FANG has an Earnings ESP of +0.91% and a Zacks Rank #3.

Other Stocks to Consider

Diamondback Energy is not the only company looking up this earnings cycle. Here are some other energy firms that you may want to consider on the basis of our model:

Par Pacific Holdings PARR has an Earnings ESP of +1.25% and a Zacks Rank #3. Par Pacific is scheduled to release earnings on Feb. 24.

You can see the complete list of today’s Zacks #1 Rank stocks here.

PARR beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 77.5%. Valued at around $2.2 billion, it has skyrocketed 173.6% in a year.

Excelerate Energy EE has an Earnings ESP of +1.03% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb. 25.

For 2026, EE has a projected earnings growth rate of 32.4%. Valued at nearly $5 billion, Excelerate Energy has gained 40.4% in a year.

Delek US Holdings DK has an Earnings ESP of +14.58% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb. 27.

Delek US Holdings’ expected EPS growth rate for three to five years is currently 29.4%, which compares favorably with the industry's growth rate of 14%. Valued at more than $2 billion, DK has surged 97.8% in a year.

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

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