ConocoPhillips Q4 EPS Misses Estimates by 8%, BOE Prices Fall 19%
ConocoPhillips reported adjusted Q4 EPS of $1.02, missing consensus $1.11 by 8%, with revenue of $14.185 billion falling short of estimates as realized BOE prices dropped 19% year-over-year to $42.46. Production rose to 2.32 million BOED but underlying output declined 2.6%, and the board declared a $0.84 quarterly dividend.
1. Fourth-Quarter Earnings Shortfall
ConocoPhillips reported adjusted EPS of $1.02 for the fourth quarter of fiscal 2025, falling short of the $1.11 consensus estimate. On an unadjusted basis, net income was $1.4 billion, or $1.17 per share, compared with $2.3 billion, or $1.90 per share, in the year-ago period. Revenue for the quarter totaled $14.185 billion, slightly below the $14.194 billion analysts expected. The 39% year-over-year decline in earnings was driven primarily by a 19% drop in the average realized price to $42.46 per barrel of oil equivalent, offset only partially by volume gains from recent asset acquisitions.
2. Operational Performance and Cost Discipline
Total production in the quarter rose to 2.32 million barrels of oil equivalent per day (BOED), up 137 MBOED year-over-year, though on an organic basis (adjusted for closed acquisitions and dispositions) output fell by 2.6%, or 63 MBOED. Lower 48 production delivered 1,439 MBOED across the Delaware Basin (673 MBOED), Midland Basin (194 MBOED), Eagle Ford (370 MBOED) and Bakken (198 MBOED). The company invested $3.0 billion in capital projects, completed $3.2 billion of asset dispositions toward its $5 billion year-end 2026 target, and generated $19.8 billion in operating cash flow. At quarter end, liquidity stood at $7.4 billion in cash and short-term investments and $1.1 billion in long-term holdings.
3. Return of Capital and 2026 Outlook
The board declared a first-quarter dividend of $0.84 per share, payable March 2, reflecting the company’s commitment to return approximately 45% of cash from operations to shareholders. In 2025, ConocoPhillips repurchased $1.0 billion of stock and distributed $1.0 billion in dividends, totaling $9.0 billion of shareholder returns. Looking ahead, 2026 capital expenditures are guided at $12 billion with adjusted operating costs of $10.2 billion. Production is forecast between 2.33 and 2.36 million BOED, with first-quarter volumes of 2.30–2.34 million BOED accounting for weather-related downtime. Management reaffirmed its target to deliver $7 billion in incremental free cash flow by 2029, supported by over $1 billion in annual synergies from the Marathon Oil integration and planned run-rate cost reductions exceeding $1 billion by year-end 2026.