Targa Resources Corp. (TRGP Quick QuoteTRGP - Free Report) reported second-quarter 2025 earnings of $2.87 per share, which beat the Zacks Consensus Estimate of $1.91. The bottom line also improved from the year-ago quarter’s level of $1.33. The outperformance was due to strong volumes across its systems in the reported quarter.

Total quarterly revenues of $4.3 billion increased 19.6% from the prior-year quarter’s level of $3.6 billion, driven by a 23% increase in revenues from sales of commodities and a 5% rise in fees from midstream services. However, the top line missed the Zacks Consensus Estimate of $4.9 billion.

The company’s adjusted EBITDA for the second quarter totaled $1.2 billion, up from $984.3 million in the prior-year period.

Taking a Closer Look at Q2 Results

On July 10, 2025, Targa declared a quarterly cash dividend of $1 per common share ($4 annualized), totaling about $217 million, payable on Aug. 15 to its shareholders of record as of July 31.

During the quarter, Houston, TX-based oil and gas storage and transportation company bought back 651,163 of its common shares for roughly $124.9 million, averaging $191.86 per share. By March 31, 2025, it still had $890.5 million available under the authorized buyback plan.

The company reported all-time-high Permian and NGL transportation volumes for the period and unveiled plans for a 43-mile expansion of its Bull Run natural gas pipeline, known as the “Bull Run Extension,” aimed at improving gas connectivity between the Permian Delaware system and WAHA.

TRGP’s Segmental Performance

Gathering and Processing: The segment recorded an operating margin of $588 million, up 3% from $573 million in the year-ago period. The figure, however, missed the Zacks Consensus Estimate of $619 million.

The improvement reflects higher Permian Basin volumes, which increased 11% year over year to an average of 6,278 MMcf/d and beat the consensus mark of 6,135 MMcf/d. The strong results were also supported by the startup of the Roadrunner II, Greenwood II and Bull Moose plants.

Logistics and Transportation: This unit reflects TRGP’s downstream operations. Its operating margin of $632 million increased 15% year over year and matched the Zacks Consensus Estimate.

The rise in operating margin stemmed from stronger pipeline transportation and fractionation margins, along with improved LPG export margins. Transportation and fractionation volumes were boosted by increased supply from the company’s Permian Gathering and Processing systems, a full quarter of Train 9 operations (added in second-quarter 2024), the start-up of the Daytona NGL Pipeline in third-quarter 2024 and the commissioning of Train 10 in fourth-quarter 2024. Fractionation volumes grew despite a planned turnaround at part of the company’s Mont Belvieu, TX, facilities. Meanwhile, LPG export margins benefited from higher volumes and increased fees.

TRGP’s fractionation volumes totaled 969 thousand barrels per day, up 7% from 902 thousand barrels per day recorded a year ago. The Zacks Consensus Estimate for the same was pegged at 1,106 thousand barrels per day. NGL pipeline transportation volumes rose 23% year over year, export volumes increased 7% and NGL sales declined 13% in the same period.

TRGP’s Costs, Capex & Balance Sheet

Targa incurred product costs of $2.4 billion, which increased 10.9% from the year-ago quarter’s figure. At the same time, the company reported operating expenses of $323.6 million, up 11% from the year-ago quarter’s level of $290.7 million.

The company spent $885.1 million on growth capital programs compared with $798.7 million in the year-ago period.

As of June 30, 2025, TRGP had cash and cash equivalents of $113.1 million and long-term debt of $16.1 billion, with a debt-to-capitalization of around 85.6%.

TRGP’s 2025 Guidance

For 2025, Targa expects its full-year adjusted EBITDA to be in the range of $4.65-$4.85 billion. This is supported by forecasted growth in its Permian Gathering and Processingfootprint, which is expected to result in record Permian, NGL pipeline transportation, fractionation and LPG export volumes.

Targa now expects its total net growth capital expenditures for 2025 to be approximately $3 billion. The increase from the prior estimate is due to the earlier-than-expected completion of several projects, the new Bull Run Extension and incremental spending for its next Permian gas processing expansions. The company's estimate for 2025 net maintenance capital expenditures remains unchanged at approximately $250 million.

Targa’s Gathering and Processing segment is moving swiftly, with the 275 MMcf/d Pembrook II plant in Permian Midland expected to come online ahead of schedule in August 2025. Building on that momentum, construction is advancing on the East Pembrook, East Driver, Bull Moose II and Falcon II plants — each designed for 275 MMcf/d capacity.

Notably, Bull Moose II is now predicted to begin operations in fourth-quarter 2025, earlier than initially planned, while the rest of the projects remain firmly on track. At the same time, the company is taking proactive steps by securing long-lead items to support its next phase of Permian gas processing expansions.

Shifting to the Logistics and Transportation segment, work continues on the Delaware Express Pipeline expansion, the 150 MBbl/d Train 11 and Train 12 fractionators in Mont Belvieu, and the GPMT LPG Export Expansion. Here too, progress is ahead of expectations, with both the Delaware Express Pipeline and Train 11 now targeted for completion in second-quarter 2026. Other announced projects are advancing as planned, supporting Targa’s strong execution across its growth portfolio.

TRGP 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 TRGP’s second-quarter results in detail, let us take a look at three other key reports in this space.

San Antonio, TX-based oil and gas refining and marketing service provider, Valero Energy Corporation (VLO Quick QuoteVLO - Free Report) , reported second-quarter 2025 adjusted earnings of $2.28 per share, which beat the Zacks Consensus Estimate of $1.73. However, the bottom line declined from the year-ago quarter’s level of $2.71. The better-than-expected quarterly results can be attributed to an increase in refining margins per barrel of throughput and lower total cost of sales. The positives were partially offset by a decline in refining throughput volumes and renewable diesel sales volumes.

The company had cash and cash equivalents of $4.5 billion at the end of the second quarter. As of June 30, 2025, it had a total debt of $8.4 billion and finance-lease obligations of $2.3 billion.

Houston, TX-based oil and gas equipment and services provider, Halliburton Company (HAL Quick QuoteHAL - Free Report) , reported second-quarter 2025 adjusted net income of 55 cents per share, which was in line with the Zacks Consensus Estimate but below the year-ago quarter’s profit of 80 cents (adjusted). The numbers reflect softer activity in the North American region, partly offset by international growth.

As of June 30, 2025, the company had approximately $2 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. Halliburton reported second-quarter capital expenditure of $354 million, up from our projection of $338.2 million.

Norway-based integrated oil and gas operator, Equinor ASA (EQNR Quick QuoteEQNR - Free Report) , reported second-quarter 2025 adjusted earnings per share of 64 cents, which missed the Zacks Consensus Estimate of 66 cents. The bottom line declined 25% from the year-ago quarter’s level of 84 cents. Weak quarterly results can be attributed to lower liquids production across major segments and reduced liquids prices. Natural declines and portfolio divestments in Nigeria and Azerbaijan also contributed to the decrease in overall production.