Coterra Energy Q1 Earnings Surpass Estimates, Revenues Miss

Coterra Energy Inc. CTRA reported first-quarter 2025 adjusted earnings per share of 78 cents, which beat the Zacks Consensus Estimate of 76 cents. The bottom line also outperformed the year-ago quarter’s 50 cents per share. This was largely attributed to stronger-than-expected operational performance, particularly in daily oil equivalent and natural gas production volumes.

This oil and gas exploration and production firm’s operating revenues of $1.9 billion missed the Zacks Consensus Estimate by $37 million. This can be attributed to weaker oil price realizations. However, the figure was outstandingly higher than the year-ago figure of $1.4 billion, driven by increased output volumes.

Coterra Energy Inc. Price, Consensus and EPS Surprise

Coterra Energy Inc. price-consensus-eps-surprise-chart | Coterra Energy Inc. Quote

On May 5, 2025, Coterra's board of directors declared a quarterly dividend of 22 cents per share to its common shareholders of record on May 15. The payout, which represents a 3.4% annualized yield, will be made on May 29.

In addition to the shareholder return in the form of dividends, the Houston, TX-based independent oil and gas company actively engaged in share repurchases during the quarter. The company repurchased 0.9 million shares for $24 million at an average price of $27.54 per share. As of March 31, 2025, CTRA has $1.1 billion remaining under its $2 billion share repurchase authorization.

Consequently, during the quarter, total shareholder returns reached $192 million, comprising $168 million in declared dividends and $24 million in share repurchases. During the quarter, the company also focused on debt reduction and repaid debt of about $250 million.

Coterra Energy has a shareholder return strategy whereby it returns 50% of its annual free cash flow to its shareholders via dividend payouts and share repurchases. However, in 2025, after the payment of the base dividend, the company is largely focused on debt reduction and expects to retire the outstanding $750 million term loans, which will mature in 2027 and 2028.

Moreover, in April 2025, CTRA added two Marcellus rigs, which are expected to keep running into the second half of 2025. By the second half of 2025, the company plans to reduce Permian activity to seven rigs from its original plan of 10 rigs. During the quarter, it also closed the previously announced acquisitions of Franklin Mountain Energy and Avant Natural Resources.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

CTRA’s Production & Price Realizations

The average first-quarter daily production increased 8.8% to 746.8 thousand barrels of oil equivalent (Mboe) from the year-ago level of 686.1 Mboe. Moreover, the figure surpassed the Zacks Consensus Estimate of 740 Mboe. The daily production of natural gas increased 2.8% year over year to 3,043.8 million cubic feet (Mmcf) per day. The figure surpassed the Zacks Consensus Estimate of 2914 Mmcf.

Turning to specific production types, oil production rose 37.8% to 141.2 thousand barrels (MBbl) per day. However, the figure missed the Zacks Consensus Estimate of 144 MBbl. On the other end, natural gas liquids (NGL) production increased 8.9% to 98.3 MBbl per day in the quarter under review. However, the figure missed the Zacks Consensus Estimate of 111 MBbl.

Regarding pricing, the average sales price for crude oil was $69.73 per barrel, indicating a 7.2% decrease from the prior-year level of $75.16. The figure slightly missed the Zacks Consensus Estimate of $70 per barrel.

The average realized natural gas price was $3.28 per thousand cubic feet compared with $2 in the year-earlier period. However, the figure slightly surpassed the consensus estimate of $3.25 per thousand cubic feet.

The average realized NGL was $23.23 per barrel compared with $21.09 in the year-earlier period. The figure surpassed the consensus estimate of $22.47 per barrel.

CTRA’s Q1 Costs & Expenses

In the quarter under discussion, the average unit cost rose to $18.55 per barrel of oil equivalent from the previous year's $15.94. This increase was due to Coterra's total operating expenses of $1202 million, which increased 21.2% from the year-ago quarter’s $992 million.

CTRA’s Financial Position

Cash flow from operations went up 33.6% to $1.1 billion, while CTRA’s cash capital expenditure for drilling and development totaled $472 million. The company’s free cash flow for the quarter amounted to $663 million.

As of March 31, 2025, the company had $186 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 $2.2 billion. Coterra Energy had a long-term debt (net) of $4.3 billion as of the same date, indicating a debt-to-capitalization of 23.1%.

CTRA’s Guidance for Q2 & 2025

Coterra Energy has lowered its full-year 2025 capital expenditures range from the existing $2.1-$2.4 billion to $2-$2.3 billion. Following the completion of its recent acquisitions in January, the company ended the first quarter with 13 rigs operating in the Permian. While Coterra’s initial plan projected running 10 rigs in the second half of 2025, it now intends to scale back to seven rigs during that period.

Moving to the second quarter guidance, CTRA expects total equivalent production in the range of 710 to 760 thousand barrels of oil equivalent per day, with oil production in the band of 147 to 157 thousand barrels of oil per day and natural gas production between 2,700 and 2,850 MMcfpd. For the upcoming quarter, the company expects its capital expenditures to be in the range of $575 to $650 million.

Furthermore, Coterra expects an estimated discretionary cash flow (non-GAAP) of approximately $4.3 billion and free cash flow (non-GAAP) of around $2.1 billion for 2025 with commodity price assumptions of about $63 per bbl WTI (West Texas Intermediate) and $3.70 per mmbtu (metric million British thermal unit) Henry Hub.

CTRA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Important Earnings at a Glance

While we have discussed CTRA’s first-quarter results in detail, let us take a look at three other key reports in this space.

The energy infrastructure providerTC Energy Corporation TRP reported first-quarter 2025 adjusted earnings of 66 cents per share, which missed the Zacks Consensus Estimate of 70 cents. Moreover, the bottom line decreased from 92 cents in the year-ago period. This underperformance could be attributed to weak Power and Energy Solutions segment results.

TRP’s quarterly revenues of $2.5 billion also missed the Zacks Consensus Estimate by $18 million. The figure decreased 19.8% year over year.

As of March 31, 2025, TC Energy’s capital investments amounted to C$1.8 billion. TRP had cash and cash equivalents worth C$2 billion and long-term debt of C$45 billion, with a debt-to-capitalization of 61.1% as of the same date.

Oil and gas equipment and services provider TechnipFMC plc FTI reported first-quarter 2025 adjusted earnings of 33 cents per share, which missed the Zacks Consensus Estimate of 36 cents, primarily due to a 4.8% year-over-year increase in costs and expenses. However, the bottom line increased from the year-ago quarter’s reported profit of 22 cents, driven by improved performance in the Subsea segment.

The company’s revenues of $2.2 billion missed the Zacks Consensus Estimate by 1.1%. However, the top line increased from the year-ago quarter’s reported figure of $2 billion.

As of March 31, FTI had cash and cash equivalents worth $1.2 billion and long-term debt of $410.8 million, with a debt-to-capitalization of 11.8%.

Houston, TX-based oil and gas equipment and services provider Baker Hughes BKR reported first-quarter 2025 adjusted earnings of 51 cents per share, which beat the Zacks Consensus Estimate of 47 cents. The bottom line also improved from the year-ago level of 43 cents.

As of March 31, 2025, Baker had cash and cash equivalents of $3,277 million. Baker had a long-term debt of $5,969 million at the end of the reported quarter, with a debt-to-capitalization of 25.9%.

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