Coterra Energy Q2 Earnings and Revenues Beat Estimates, Both Rise Y/Y

Core Insights - Coterra Energy Inc. (CTRA) reported second-quarter 2025 adjusted earnings per share of 48 cents, exceeding the Zacks Consensus Estimate of 43 cents and the previous year's 37 cents, driven by strong operational performance in oil and natural gas production volumes [1][13] - The company's operating revenues reached $2 billion, surpassing the Zacks Consensus Estimate of $1.7 billion and significantly higher than the year-ago figure of $1.3 billion, attributed to increased natural gas price realizations [2] Financial Performance - Coterra Energy declared a quarterly dividend of 22 cents per share, representing a 3.6% annualized yield, to be paid on August 28, 2025 [3] - The company repurchased 0.9 million shares for $23 million during the quarter, with $1.1 billion remaining under its $2 billion share repurchase authorization as of June 30, 2025 [4] - Total shareholder returns for the quarter amounted to $191 million, consisting of $168 million in declared dividends and $23 million in share repurchases, alongside a debt repayment of approximately $100 million [5] Production and Pricing - Average daily production increased by 17.1% to 783.9 thousand barrels of oil equivalent (Mboe) from 669.2 Mboe year-over-year, exceeding the Zacks Consensus Estimate of 741 Mboe [8] - Oil production rose by 45% to 155.4 thousand barrels (MBbl) per day, surpassing the Zacks Consensus Estimate of 154 MBbl per day, while natural gas liquids (NGL) production increased by 30.3% to 128.7 MBbl per day [9] - The average sales price for crude oil was $62.80 per barrel, a 20.9% decrease from the prior year's $79.37, while the average realized natural gas price was $2.20 per thousand cubic feet, up from $1.26 year-over-year [10][11] Costs and Expenses - The average unit cost rose to $18.41 per barrel of oil equivalent from $16.26 the previous year, with total operating expenses increasing by 29.2% to $1,261 million [14] - Cash flow from operations increased by 68% to $937 million, with cash capital expenditures totaling $569 million, resulting in a free cash flow of $329 million for the quarter [15] Financial Position - As of June 30, 2025, Coterra Energy had $192 million in cash and cash equivalents, with no debt outstanding under its $2 billion revolving credit facility, leading to total liquidity of approximately $2.2 billion [16] - The company reported long-term net debt of $4.2 billion, reflecting a debt-to-capitalization ratio of 22.3% [16] Guidance - Coterra Energy has revised its full-year 2025 capital expenditures range to $2.1-$2.3 billion and anticipates an effective tax rate of 22% for the year [17] - For Q3 2025, the company expects total equivalent production between 740-790 Mboe per day, with oil production between 158-168 MBbl per day and natural gas production between 2,750 and 2,900 MMcf/d [18] - The estimated discretionary cash flow for 2025 is projected at approximately $4.4 billion, with free cash flow around $2.1 billion based on commodity price assumptions [19]