Diamondback Q1 earnings beat estimates on higher production

U.S. energy operator Diamondback Energy reported first-quarter 2025 adjusted earnings per share of $4.54, which beat the Zacks Consensus Estimate of $4.09 and came ahead of the year-ago bottom line of $4.50.

The outperformance reflects strong production and lower costs, which more than offset a fall in oil realization.

Meanwhile, revenues of $4 billion jumped 82% from the year-ago quarter’s sales and outperformed the Zacks Consensus Estimate by 8.1%.

FANG repurchased $575 million of shares in the first quarter and a further $255 million worth of shares in the current quarter. The company’s board of directors also declared a quarterly cash dividend of $1 per share to its common shareholders of record on May 15. The payout will be made on May 22.

Diamondback Energy, Inc. price, consensus and EPS surprise

Diamondback Energy, Inc. price-consensus-eps-surprise-chart | Diamondback Energy, Inc. Quote

Production and realized prices

FANG’s production of oil and natural gas averaged 850,656 barrels of oil equivalent per day (BOE/d), comprising 56% oil. The figure was up 84.5% from the year-ago quarter but marginally missed our estimate of 850,688.7 BOE/d. While crude and natural gas output increased 72% and 99% year over year, respectively, natural gas liquids volumes surged 96%.

The average realized oil price during the most recent quarter was $70.95 per barrel, 5.5% lower than the year-ago realization of $75.06, but in line with our projection. Meanwhile, the average realized natural gas price surged to $2.11 per thousand cubic feet (Mcf) from 99 cents in the year-ago period and came just above our estimate of $2.10. Overall, the upstream oil and gas company fetched $47.77 per barrel compared with $50.07 a year ago.

Costs and financial position

Diamondback’s first-quarter cash operating cost was $10.48 per barrel of oil equivalent (BOE) compared with $11.52 in the prior-year quarter and our projection of $12.21. The drop in costs compared to the year-ago period reflected a decrease in lease operating expenses to $5.33 per BOE from $6.08 in the first quarter of 2024. Further, FANG’s gathering, processing and transportation expenses fell 21.2% year over year to $1.45 per BOE, while cash G&A expenses fell in the first quarter of 2025 to 72 cents per BOE from 76 cents during the corresponding period of 2024. However, production and ad valorem taxes rose 4.9% year over year to $2.98 per BOE.

Diamondback logged $942 million in capital expenditure — spending $864 million on drilling and completion, $57 million on infrastructure and environment, and $21 million on capital workovers. The company booked $1.6 billion in adjusted free cash flow in the first quarter. 

As of March 31, the Permian-focused operator had approximately $1.8 billion in cash and cash equivalents and $13 billion in long-term debt, representing a debt-to-capitalization of 23.7%.

Guidance

Diamondback Energy’s latest guidance takes into account the Endeavor merger, which was completed on Sept. 10. last year and the acquisition of Double Eagle from April 1, 2025 onward. FANG looks to pump around 857,000-900,000 BOE/d of hydrocarbon in 2025 compared to 883,000-909,000 projected previously. Of this, oil volumes are likely to be between 480,000 and 495,000 barrels per day (485,000-498,000 before). This Zacks Rank #3 (Hold) company also forecast a capital spending budget between $3.4 billion and $3.8 billion compared to $3.8 billion to $4.2 billion before. 

Some key E&P earnings

While we have discussed Diamondback Energy’s first-quarter results in detail, let’s see how some other upstream companies have fared this earnings season.

ConocoPhillips, one of the world’s largest independent oil and gas producers, reported fourth-quarter 2025 adjusted earnings per share of $2.09, which beat the Zacks Consensus Estimate of $2.06. The outperformance can be attributed to higher oil equivalent production volumes, partly offset by decreased realized oil prices.

As of March 31, ConocoPhillips had $6.3 billion in cash and cash equivalents. The company had a total long-term debt of $23.2 billion and a short-term debt of $608 million as of the same date. ConocoPhillips’ capital expenditure and investments totaled $3.4 billion. Net cash provided by operating activities was $6.1 billion.

Natural gas producer EQT Corporation reported earnings from continuing operations of $1.18 per share, which beat the Zacks Consensus Estimate of $1.02. The better-than-expected quarterly earnings were driven by higher sales volume and increased average realized prices.

EQT’s sales volume increased to 571 billion cubic feet equivalent (Bcfe) from the year-ago quarter’s level of 534 Bcfe. The reported figure also beat our estimate of 543 Bcfe. EQT’s natural gas sales volume was 536.3 Bcf, up from 499.3 Bcf in the year-ago quarter. The figure also beat our estimate of 509.8 Bcf.

Magnolia Oil & Gas, another U.S. energy operator, reported first-quarter 2025 net profit of 55 cents per share, which beat the Zacks Consensus Estimate of 53 cents. This outperformance can be attributed to a healthy increase in production volumes driven by strong well productivity in the company’s Giddings asset. In the quarter under review, Magnolia recorded $224.5 million in net cash from operating activities and achieved a free cash flow of $110.5 million.

The average daily total output of 96,549 BOE/d increased from the year-ago quarter’s 84,784 BOE/d. The figure also surpassed our estimate of 93,975 BOE/d. Oil and gas production increased 13.9% year over year. As of March 31, Magnolia had cash and cash equivalents of $247.6 million. The company had long-term debt of $392.7 million, reflecting a debt-to-capitalization of 16.5%.

Want the latest recommendations from Zacks Investment Research? Download 7 Best Stocks for the Next 30 Days. Click to get this free report