ConocoPhillips (COP) — Earnings Preview Q3 2026
Key Factors to Watch Next Quarter
| Factor | Context / Importance |
|---|---|
| Revenue | Consensus for Q3 2026: $18,135M. Coming off strong YoY growth (+24% in Q2 2026). |
| EBITDA | Consensus for Q3 2026: $8,243M. Margin expansion and capital efficiency are key themes. |
| Net Income | Consensus for Q3 2026: $3,249M. Profitability trends vs. prior year. |
| EPS GAAP | Consensus for Q3 2026: $2.68. Compare to prior quarter and year. |
| Cash Flow per Share | Consensus for Q3 2026: $5.40. Capital returns and FCF inflection are central to the thesis. |
| Production Volumes | Guidance: Q3 2026 range 2,290,000–2,320,000 BOE/d. Watch for execution vs. guidance and asset sales. |
| Shareholder Returns | Targeting 45% of CFO returned; Q2 2026 distributions were $3B. |
| CapEx | Guidance unchanged: $12B–$12.5B for FY 2026. Monitor for discipline and efficiency. |
| Operating Costs | Guidance unchanged: $10.2B for FY 2026. Cost reduction program ahead of plan. |
| LNG Projects | NFE, NFS, Port Arthur progress; first LNG expected 2027. Watch for timing and cash flow impact. |
| Willow Project | On track for early 2029 first oil; milestone: 50% complete. |
| Portfolio Changes | $5B disposition target achieved; new Middle East assets (Iraq, Syria) added. |
Summary and Conclusions
- ConocoPhillips enters Q3 2026 with strong momentum: Q2 2026 saw record Permian production, robust free cash flow ($4.2B), and increased shareholder distributions ($3B).
- Guidance remains unchanged: Management continues to guide for $12B–$12.5B CapEx, $10.2B OpEx, and 45% CFO return to shareholders for FY 2026.
- Production guidance for Q3 2026 is 2,290,000–2,320,000 BOE/d, reflecting ramp-up in Qatar and continued Lower 48 growth, offset by asset sales.
- LNG and Willow projects are progressing as planned: NFE and NFS expected to contribute in 2027; Willow is 50% complete, targeting early 2029 first oil.
- Portfolio optimization continues: $5B disposition target achieved ahead of schedule; new conventional assets in Iraq and Syria added at competitive cost of supply.
- Capital efficiency and cost reductions are key themes: Management expects structurally lower reinvestment rates and breakeven prices moving toward low $30s WTI by 2029.
- Dividend growth remains top quartile S&P 500: Supported by buybacks (~5% of stock/year) and peer-leading free cash flow trajectory.
Financial Snapshot — Quarterly Actuals and Forward Consensus
Quarterly Results and Estimates ($M)
| Period | Revenue | EBITDA | Net Income | EPS GAAP | Cash Flow/Share |
|---|---|---|---|---|---|
| Q2 2026 | 19,483 | 8,628 | 3,578 | 3.02 | 5.62 |
| Q1 2026 | 16,429 | 6,538 | 2,070 | 1.70 | 4.20 |
| Q4 2025 | 13,078 | 5,469 | 1,404 | 1.14 | 3.44 |
| Q3 2025 | 14,628 | 6,050 | 1,757 | 1.40 | 4.19 |
| Q2 2025 | 14,890 | 5,882 | 1,707 | 1.34 | 3.51 |
| Q3 2026 (cons.) | 18,135 | 8,243 | 3,249 | 2.68 | 5.40 |
| Q4 2026 (cons.) | 18,157 | 8,336 | 3,266 | 2.83 | 5.53 |
Consensus figures are not actuals; actuals are reported revenue.
Annual Results and Estimates ($M)
| Fiscal Year | Revenue | EBITDA | Net Income | EPS GAAP | Cash Flow/Share |
|---|---|---|---|---|---|
| FY 2026 (cons.) | 71,857 | 32,578 | 12,969 | 10.66 | 21.21 |
| FY 2025 | 60,182 | 25,311 | 7,923 | 6.33 | 15.80 |
| FY 2024 | 56,974 | 24,621 | 9,031 | 7.94 | 16.94 |
Guidance Summary — FY 2026
| Metric | Guidance (FY 2026) | Context Notes |
|---|---|---|
| CapEx | $12B–$12.5B | Unchanged; slight increase due to Permian activity and OBO spend |
| Operating Costs | $10.2B | Unchanged; cost reduction program ahead of plan |
| Production | 2,230,000–2,260,000 BOE/d | Modest growth; Q3 guidance 2,290,000–2,320,000 BOE/d |
| Shareholder Returns | 45% of CFO | Commitment to peer-leading capital returns |
| Dividend Growth | Top quartile S&P 500 rate | Supported by buybacks and FCF trajectory |
| Free Cash Flow Inflection | $7B by 2029 | Driven by Willow, LNG, cost reduction; double 2025 FCF |
Management Commentary — Recent Themes
- On Capital Efficiency: "We expect our capital efficiency improvements to continue in 2026, again driven by strong well productivity, ongoing D&C excellence and further increases in our longer lateral developments."
- On Portfolio Optimization: "Disciplined portfolio management remains central to how we run ConocoPhillips. So we'll continue to high-grade and optimize our portfolio. That work never stops."
- On Shareholder Returns: "We continue to target returning 45% of our CFO to shareholders this year. We averaged about 40% for the first half, meaning we expect to increase the distribution percentage over the second half of the year."
- On LNG Strategy: "Our commercial LNG strategy builds on our global scale and decades of resource LNG experience, allowing us to move lower value natural gas into premium-priced international markets, while maintaining full value chain control to maximize margins through the cycle."
- On Willow Project: "Willow continues to hit all key milestones in advance of first oil in early 2029."
What Changed — Recent Developments
- CEO Transition: Andy O'Brien named President & CEO effective September 1, 2026; Ryan Lance becomes Executive Chairman.
- Dispositions: $5B disposition target achieved ahead of schedule; $1.7B of noncore Lower 48 asset sales in July.
- LNG Portfolio Expansion: Added 2 MTPA offtake (Indonesia, Gulf Coast); total offtake now 12 MTPA.
- Middle East Entry: Strategic agreements for low-cost supply growth in Iraq (Kirkuk field) and Syria; production expected to fund redevelopment.
- Permian Record: Q2 2026 Permian production exceeded 900,000 BOE/d; 10% YoY growth in H1 2026.
- Willow Milestone: Project is 50% complete; peak CapEx is behind, capital expected to decline post-2029.
Year-on-Year Comparison — Q2 2026 vs. Q2 2025
| Metric | Q2 2026 | Q2 2025 | YoY Change |
|---|---|---|---|
| Revenue | 19,483 | 14,890 | +4,593 (+31%) |
| EBITDA | 8,628 | 5,882 | +2,746 (+47%) |
| Net Income | 3,578 | 1,707 | +1,871 (+110%) |
| EPS GAAP | 3.02 | 1.34 | +1.68 (+125%) |
| Cash Flow/Share | 5.62 | 3.51 | +2.11 (+60%) |
Conclusion: COP is coming off a very strong YoY comparable, with significant growth in revenue, EBITDA, net income, and cash flow per share. The next quarter will be measured against these elevated results.
Signals to Watch When They Report Next
- Execution vs. production guidance (2,290,000–2,320,000 BOE/d)
- Capital discipline: CapEx and OpEx adherence to guidance
- Progress on LNG and Willow milestones
- Impact of asset sales and new Middle East assets on portfolio mix and cash flow
- Dividend growth and buyback pace
- Free cash flow trajectory and breakeven price movement
- Any updates to guidance or outlook given macro volatility
Summary: ConocoPhillips is entering Q3 2026 with strong financial and operational momentum, robust capital returns, and a clear path to sector-leading free cash flow growth. The most important factors to watch are execution on production and capital efficiency, progress on major projects (LNG, Willow), and continued delivery on shareholder returns. The company is coming off a tough YoY comparable, but management remains confident in delivering its plan.
