Hess Corporation HES reported first-quarter 2025 adjusted earnings per share (EPS) of $1.81, which beat the Zacks Consensus Estimate of $1.77. The bottom line, however, declined from the year-ago quarter’s level of $3.16.
Total quarterly revenues decreased to $2,938 million from $3,341 million in the year-ago period. The top line, however, beat the Zacks Consensus Estimate of $2,901 million. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The better-than-expected quarterly earnings were primarily driven by sustained crude oil and higher natural gas liquids (“NGL”) production. The positives were partially offset by lower crude oil price realizations and an increase in total costs and expenses.
Hess Corporation Price, Consensus and EPS Surprise
Hess Corporation Price, Consensus and EPS Surprise
The exploration and production business reported adjusted earnings of $563 million, significantly down from $997 million a year ago. The business was affected by a decrease in realized crude oil prices.
Quarterly hydrocarbon production totaled 476 thousand barrels of oil equivalent per day (MBoe/d), flat year over year. The reported figure beat our estimate of 470.7 MBoe/d.
Crude oil production totaled 304 thousand barrels per day (MBbls/d) in the first quarter of 2025 compared with 305 MBbls/d in the corresponding period of 2024. The figure beat our estimate of 299.1 MBbls/d.
NGL production totaled 76 MBbls/d, up from 71 MBbls/d in the prior-year quarter. The reported figure also beat our estimate of 72.7 MBbls/d.
Natural gas production totaled 574 thousand cubic feet per day (Mcf/d), down from 599 Mcf/d a year ago. The reported figure also missed our estimate of 593.2 Mcf/d.
Worldwide crude oil realization per barrel of $71.22 (excluding the impacts of hedging) decreased from $80.06 in the year-ago period. The global natural gas price increased to $4.89 per Mcf from the year-ago figure of $4.62. The average global NGL selling price increased to $24.08 per barrel from $22.97 a year ago.
Mid-Stream
The company generated adjusted net earnings of $70 million, up from $67 million a year ago.
Operating Expenses of HES
Operating expenses for the first quarter totaled $470 million compared with the year-ago level of $412 million. The reported figure exceeded our projection of $425.2 million.
Exploration expenses increased to $76 million from $42 million recorded in the year-ago period. Marketing costs decreased to $578 million from $622 million a year ago.
Total costs and expenses increased to $2,157 million from $1,926 million in the prior-year period.
HES’ Financials
Net cash provided by operating activities amounted to $1,401 million. Hess’ capital expenditure for exploration and production activities totaled $1,085 million.
As of March 31, 2025, the company had $1,324 million in cash and cash equivalents. Its long-term debt was $8,654 million at the end of the first quarter.
Outlook
For the second quarter of 2025, Hess expects the exploration and production business’ net production to be in the range of 480-490 thousand barrels of oil equivalent per day. Hess has announced that the fourth oil development in Starbroek Block, Yellowtail, is slated to start up in the third quarter of 2025. The company forecasts a total exploration and production capital and exploratory expenditure of $4.5 billion for full-year 2025.
HES’ Zacks Rank and Key Picks
HES currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Energy sector are Archrock Inc. AROC, Nine Energy Service NINE and Kinder Morgan, Inc. KMI. While Archrock currently sports a Zacks Rank #1 (Strong Buy), Nine Energy Service and Kinder Morgan carry a Zacks Rank #2 (Buy) each. You can seethe complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues. With natural gas playing an increasingly important role in the energy transition journey, AROC is expected to witness sustained demand for its services.
Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. It operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the need for NINE’s services is anticipated to increase, which should position it for growth in the long run.
Kinder Morgan is a leading midstream player with a stable and resilient business model in North America, largely driven by take-or-pay contracts. KMI’s stable business model shields it from commodity price volatility, resulting in predictable earnings and facilitating reliable capital returns to shareholders. In the first quarter of 2025, Kinder Morgan increased its quarterly cash dividend to 29.25 cents per share, reflecting an approximately 2% increase from the prior-year level.
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