ConocoPhillips targets $1B cost cut after missing Q4 estimates

ConocoPhillips (NYSE:COP) reported a decline in fourth-quarter profit on Thursday, missing Wall Street expectations as a significant drop in realized energy prices overshadowed a 6% increase in production volumes.

The Houston-based energy giant reported adjusted earnings of $1.02 per share, falling short of the Zacks Consensus Estimate of $1.08.

Total revenue for the quarter was $14.19 billion, down from $14.74 billion a year earlier.

The primary headwind was a 19% decrease in the company's average realized price, which fell to $42.46 per barrel of oil equivalent (boe).

This price squeeze reflects broader market concerns over oversupply and global trade tariffs, which have kept benchmark Brent prices under pressure.

Despite the earnings miss, ConocoPhillips demonstrated strong operational scale following its $22.5 billion acquisition of Marathon Oil in late 2024.

Production for the quarter hit 2.32 million barrels of oil equivalent per day (boepd), up 137,000 boepd from the prior year.

CEO Ryan Lance noted that the company has already doubled its initial synergy targets for the Marathon integration, and he announced a new "aggressive" goal to slash an additional $1 billion in capital and operating costs by the end of 2026 to protect the company's 45% cash-return target for shareholders.

Looking ahead, ConocoPhillips provided a robust 2026 outlook.

The company expects full-year production to range between 2.33 million and 2.36 million MMBOED.

While capital expenditures are set at $12 billion, the firm is banking on its diversified global portfolio—including the Willow project in Alaska and three major equity LNG projects—to generate an incremental $7 billion in free cash flow by 2029.