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SM Q4 Earnings Top Estimates on Lower Expenses, Revenues Fall Y/Y
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Key Takeaways
SM Energy posted Q4 EPS of 83 cents, topping estimates, though revenues fell to $705M from $852M.
SM's output slipped 1% to 206.9 MBoe/d as lower oil, gas and NGL prices weighed on results.
SM Energy cut total operating expenses to $523M and generated $198M in adjusted free cash flow.
SM Energy (SM - Free Report) reported fourth-quarter 2025 adjusted earnings of 83 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents. The bottom line declined from the year-ago quarter’s figure of $1.91.
Total quarterly revenues of $705 million missed the Zacks Consensus Estimate of $766 million. The top line declined from the year-ago quarter’s level of $852 million.
The better-than-expected quarterly earnings were primarily driven by lower operating expenses. A decline in average realized commodity prices partially offset the gains.
SM Energy Company Price, Consensus and EPS Surprise
SM Energy’s fourth-quarter production volume amounted to 206.9 thousand barrels of oil equivalent per day (MBoe/d) (almost 52% oil), reflecting a 1% year-over-year decrease from 208 MBoe/d. The Zacks Consensus Estimate for the same was pinned at 209 MBoe/d. The company’s production in the quarter was affected by the weather and the timing of well completions.
Oil production increased approximately 1% year over year to 108.4 thousand barrels per day (MBbls/d). The Zacks Consensus Estimate for the same was pegged at 111 MBbls/d.
The company produced 428.3 million cubic feet per day of natural gas in the quarter, up 1% year over year. Natural gas liquids production totaled 27.1 MBbls/d in the fourth quarter, declining 10% year over year.
Realized Prices
Before the effects of derivative settlements, the average realized price per Boe was $36.92 compared with $43.68 in the year-ago quarter. The average realized oil price slipped 16% to $58.17 per barrel.
The average realized price of natural gas fell 17% year over year to $1.81 per thousand cubic feet, while that for natural gas liquids declined 16% to $20.67 per barrel.
Costs & Expenses
On the cost front, unit lease operating expenses increased 4% year over year to $5.55 per Boe. General and administrative expenses decreased 4% to $2.10 per Boe from the prior-year level of $2.19. Transportation expenses dropped 10% to $3.67 per Boe.
Total hydrocarbon production expenses in the quarter were $207 million compared with $215 million in the year-ago quarter. Total exploration expenses were $18 million, up from $16 million in the year-ago quarter. Total operating expenses for the quarter declined to $523 million from $565 million in the year-ago quarter.
Capex
Capital expenditures in the December-end quarter totaled $216 million, and adjusted free cash flow amounted to $198 million.
Balance Sheet
As of Dec. 31, 2025, SM Energy had cash and cash equivalents of $368 million and a net debt of $2.4 billion.
Guidance
For the first quarter of 2026, SM Energy expects total production to be in the range of 30.5-32.5 million barrels of oil equivalent (MMBoe). Oil is expected to account for approximately 52% of total production. For full-year 2026, net production volume is expected to be in the range of 146-153 MMBoe, with approximately 54% from oil. Capital expenditures (adjusted for accruals) are forecasted to be in the $2.65-$2.85 billion range for the year.
Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues. With natural gas playing an increasingly important role in the energy transition journey, AROC is expected to witness sustained demand for its services.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company ended the year with a strong backlog of $16.6 billion, providing revenue visibility. FTI also prioritizes rewarding its investors, having returned $1 billion to shareholders in 2025.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.
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SM Q4 Earnings Top Estimates on Lower Expenses, Revenues Fall Y/Y
Key Takeaways
SM Energy (SM - Free Report) reported fourth-quarter 2025 adjusted earnings of 83 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents. The bottom line declined from the year-ago quarter’s figure of $1.91.
Total quarterly revenues of $705 million missed the Zacks Consensus Estimate of $766 million. The top line declined from the year-ago quarter’s level of $852 million.
The better-than-expected quarterly earnings were primarily driven by lower operating expenses. A decline in average realized commodity prices partially offset the gains.
SM Energy Company Price, Consensus and EPS Surprise
SM Energy Company price-consensus-eps-surprise-chart | SM Energy Company Quote
Operational Performance
Production
SM Energy’s fourth-quarter production volume amounted to 206.9 thousand barrels of oil equivalent per day (MBoe/d) (almost 52% oil), reflecting a 1% year-over-year decrease from 208 MBoe/d. The Zacks Consensus Estimate for the same was pinned at 209 MBoe/d. The company’s production in the quarter was affected by the weather and the timing of well completions.
Oil production increased approximately 1% year over year to 108.4 thousand barrels per day (MBbls/d). The Zacks Consensus Estimate for the same was pegged at 111 MBbls/d.
The company produced 428.3 million cubic feet per day of natural gas in the quarter, up 1% year over year. Natural gas liquids production totaled 27.1 MBbls/d in the fourth quarter, declining 10% year over year.
Realized Prices
Before the effects of derivative settlements, the average realized price per Boe was $36.92 compared with $43.68 in the year-ago quarter. The average realized oil price slipped 16% to $58.17 per barrel.
The average realized price of natural gas fell 17% year over year to $1.81 per thousand cubic feet, while that for natural gas liquids declined 16% to $20.67 per barrel.
Costs & Expenses
On the cost front, unit lease operating expenses increased 4% year over year to $5.55 per Boe. General and administrative expenses decreased 4% to $2.10 per Boe from the prior-year level of $2.19. Transportation expenses dropped 10% to $3.67 per Boe.
Total hydrocarbon production expenses in the quarter were $207 million compared with $215 million in the year-ago quarter. Total exploration expenses were $18 million, up from $16 million in the year-ago quarter. Total operating expenses for the quarter declined to $523 million from $565 million in the year-ago quarter.
Capex
Capital expenditures in the December-end quarter totaled $216 million, and adjusted free cash flow amounted to $198 million.
Balance Sheet
As of Dec. 31, 2025, SM Energy had cash and cash equivalents of $368 million and a net debt of $2.4 billion.
Guidance
For the first quarter of 2026, SM Energy expects total production to be in the range of 30.5-32.5 million barrels of oil equivalent (MMBoe). Oil is expected to account for approximately 52% of total production. For full-year 2026, net production volume is expected to be in the range of 146-153 MMBoe, with approximately 54% from oil. Capital expenditures (adjusted for accruals) are forecasted to be in the $2.65-$2.85 billion range for the year.
SM’s Zacks Rank and Key Picks
SM currently carries a Zacks Rank #3 (Hold).
Some top-ranked stocks from the energy sector are Archrock Inc. (AROC - Free Report) , TechnipFMC plc (FTI - Free Report) and Oceaneering International (OII - Free Report) . While Archrock and TechnipFMC sport a Zacks Rank #1 (Strong Buy) each, Oceaneering carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues. With natural gas playing an increasingly important role in the energy transition journey, AROC is expected to witness sustained demand for its services.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company ended the year with a strong backlog of $16.6 billion, providing revenue visibility. FTI also prioritizes rewarding its investors, having returned $1 billion to shareholders in 2025.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.