Coterra Energy Inc. (CTRA) reported fourth‑quarter 2025 results that included net income of $368 million and earnings per share of $0.39, falling short of the consensus estimate of $0.45 by $0.06 (13.3%). The company’s revenue for the quarter reached $1.96 billion, beating the consensus estimate of $1.91 billion and reflecting a 40.4% year‑over‑year increase driven by robust demand in its core Permian Basin and Marcellus Shale operations.
Gross profit margin expanded to 71.4% from 70.2% in the prior year, a result of higher crude prices and a favorable production mix that shifted output toward higher‑margin assets. Operating income rose to $280 million, up from $260 million in Q4 2024, while operating margin improved to 14.3% from 13.5%. The company’s net debt to adjusted EBITDAX ratio remained at 0.8x, underscoring a conservative balance‑sheet stance.
The earnings miss was largely attributable to a $0.06 shortfall in EPS, driven by higher operating costs that offset the benefit of stronger crude prices. While revenue beat expectations, the company faced cost inflation in drilling and completion services, which compressed profitability. The company also reported a one‑time charge related to asset revaluation, further dampening earnings.
Coterra maintained its full‑year 2025 guidance and issued initial standalone guidance for 2026, projecting capital expenditures of $2.25 billion and free cash flow of approximately $2.35 billion. The guidance reflects confidence in maintaining capital efficiency while preparing for the pending all‑stock merger with Devon Energy, expected to close in Q2 2026. The company also reiterated its commitment to shareholder returns with a quarterly dividend of $0.22 per share.
CEO Tom Jorden highlighted that the quarter’s performance was driven by efficient capital allocation and strong execution, noting that the company is “well positioned for a highly capital efficient 2026” and expressing enthusiasm about the Devon merger. He emphasized that the combined entity would capture $1 billion in annual synergies and strengthen its position as a Delaware Basin‑focused shale leader.
Market reaction to the results was muted to slightly negative. After the earnings release, the company’s stock experienced a modest after‑hours decline of about 0.57%, followed by a 1.4% drop in subsequent trading. Investors focused on the EPS miss despite the revenue beat, and the standalone 2026 guidance ahead of the Devon merger added a layer of caution to the market’s assessment.
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