Why Is Viper Energy (VNOM) Up 2.9% Since Last Earnings Report?

Core Viewpoint - Viper Energy Partners reported better-than-expected Q3 2025 earnings, but the overall performance shows signs of potential challenges ahead due to declining realized prices and rising expenses [2][4][14]. Financial Performance - Adjusted EPS for Q3 2025 was 40 cents, beating the Zacks Consensus Estimate of 38 cents but down from 49 cents a year ago [2]. - Operating income reached $418 million, exceeding the Zacks Consensus Estimate of $403 million and significantly up from $211 million in the prior year [3]. - Total expenses surged to $594 million, compared to $75 million in the same quarter last year, and above the estimate of $245.8 million [9]. Production Metrics - Total production was 10,015 thousand oil-equivalent barrels (MBoe), up from 4,542 MBoe a year ago, surpassing the estimate of 9,709 MBoe [5]. - Oil production increased to 5,160 thousand barrels (MBbls) from 2,482 MBbls year-over-year, exceeding the estimate of 5,054 MBbls [5]. - Natural gas production rose to 14,655 million cubic feet (MMcf) from 6,150 MMcf in the same period last year [6]. Realized Prices - Average realized price per barrel of oil equivalent was $39.24, down from $45.83 in Q3 2024, and slightly below the estimate of $39.76 [7]. - Average realized oil price was $64.34 per barrel, down from $75.24 a year ago but above the estimate of $60.50 [7]. - Natural gas price was $1.02 per thousand cubic feet, significantly up from $0.13 a year ago, but below the estimate of $1.90 [8]. Cash Flow and Balance Sheet - Net cash provided by operating activities was $281 million, an increase from $203 million in Q3 2024 [11]. - As of September 30, 2025, cash and cash equivalents stood at $53 million, with net long-term debt reported at $2,241 million [12]. Guidance - Production for Q4 2025 is projected to be between 124-128 Mboe/d, with full-year 2025 net production expected in the range of 92.75-93.50 Mboe/d [13]. Market Sentiment - There has been a downward trend in estimates, with the consensus estimate shifting down by 8.12% [14]. - Viper Energy currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [16].