EQT Corporation EQT reported robust second-quarter 2025 earnings, backed by its core upstream operations. Despite this, the stock price has lost nearly 4% since its earnings release on July 22. The leading natural gas producer is now undervalued, and its current affordability is reflected in its trailing 12-month enterprise value-to-EBITDA (EV/EBITDA) ratio of 8.47, significantly lower than the industry’s 10.83.
EQT’s Upstream Business
EQT is a leading producer of natural gas in the United States, with a primary focus on the Appalachian region. At its current drilling pace, the natural gas producer has sufficient locations to continue operations for more than three decades. The company expects its drilling and upstream operations to yield consistently good results, particularly during the drilling of new wells. It currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Robust Q2 Earnings
EQT reported second-quarter 2025 adjusted earnings from continuing operations of 45 cents per share, which beat the Zacks Consensus Estimate of 44 cents. The bottom line increased from the year-ago reported loss of 8 cents.
Adjusted operating revenues increased to $1,599 million from $1,183 million in the prior-year quarter. However, the top line missed the Zacks Consensus Estimate of $1,793 million.
The strong quarterly earnings were driven by higher sales volume and increased average realized prices.
Q2 Operations Favorable
In the June quarter, EQT produced 568.2 billion cubic feet (Bcfe) of natural gas, higher than 507.5 Bcfe in the prior-year quarter. The production volumes, however, marginally missed our estimate of 569.3 Bcfe.
Natural gas contributed about 94% of the total production, amounting to 534.4 Bcf. Although this was slightly below our estimate of 535.3 Bcf, it increased from the previous year's 474.1 Bcf. The year-over-year growth was driven by strong well performance.
Also, the upstream player reported an average natural gas price, including cash-settled derivatives, at $2.69 per Mcf, higher than $2.16 in the prior-year quarter.
Earnings Update for XOM & CVX
Two other energy giants, Exxon Mobil Corporation XOM and Chevron Corporation CVX, are slated to release second-quarter results on Aug 1, 2025. XOM disclosed in an 8-K filing that it expects earnings to be hurt sequentially by lower oil and natural gas prices. With exploration and production activities contributing mostly to XOM’s bottom line, a weaker commodity pricing environment in the June quarter of this year is a concern.
Softer commodity prices are expected to hurt XOM’s upstream business, as the energy giant forecasts that lower oil prices will sequentially decrease its upstream earnings by $800 million to $1.2 billion. A change in gas prices will reduce its upstream profit by $300 million to $700 million. Thus, it can be assumed that ExxonMobil’s second-quarter results are going to take a hit. The Zacks Consensus Estimate for XOM’s earnings for the June quarter is pegged at $1.46 per share, suggesting a decline of almost 32% year over year.
Coming to Chevron’s story, the Zacks Consensus Estimate of CVX’s earnings for the second quarter is pegged at $1.66 per share, suggesting a decline of almost 35% year over year.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
