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SM Energy Q3 profit misses on operational downtime

By Reuters News


Overview

  • U.S. oil and gas producer's Q3 adjusted EPS missed analyst expectations

  • Company returned $133 mln to shareholders and redeemed $417 mln in debt in Q3

  • Q3 oil production affected by downtime and takeaway constraints, prompting lower full-year oil guidance


Outlook

  • Company lowers full-year 2026 oil production guidance to 220-222 MBbl/d

  • Company narrows full-year 2026 total production guidance to 420-422 MBoe/d

  • SM Energy expects 2026 capital expenditures of about $2.75 bln


Result Drivers

  • MERGER SYNERGIES - Co said merger integration delivered higher-than-expected cost and operational synergies

  • OPERATIONAL DOWNTIME - Co cited higher-than-planned downtime in the Permian Basin and takeaway constraints in the Uinta Basin as factors reducing oil volumes


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Adjusted EPS

Miss

$1.95

$1.98 (15 Analysts)

Q3 EPS

$0.39

Q3 Net Income

$93 mln

Q3 Basic EPS

$0.39

Q3 Income From Operations

$236 mln

Q3 Pretax Profit

$123 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 6 "hold" and 1 "sell" or "strong sell"

  • The average consensus recommendation for the oil & gas exploration and production peer group is "buy"

  • Wall Street's median 12-month price target for SM Energy Co is $43.88, about 17.2% above its November 2 closing price of $37.44

  • The stock recently traded at 4 times the next 12-month earnings vs. a P/E of 5 three months ago


Reuters Recommended Reads

  • Nov 2 - Diamondback Energy Q3 revenue beats on higher oil output

  • Nov 2 - Valaris Ltd Q3 revenue rises 10% on drillship contracts

  • Nov 2 - Allison Transmission Q3 sales jump 121%, beat estimates


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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