ConocoPhillips beats Q2 profit estimates by 13.7% as CEO retires

ConocoPhillips reported Q2 adjusted earnings of $3.24 a share, beating consensus by 13.7 percent, as record Permian output pushed production above the high end of guidance.

"We have positioned the company for long-term success with a track record of delivering superior returns on and of capital through the cycles," Chairman and Chief Executive Officer Ryan Lance said. Lance, who has led the company for 14 years, will retire as CEO effective Sept. 1, with Chief Financial Officer Andy O'Brien assuming the role of president and CEO.

Revenue came in at $18.64 billion, slightly below the $18.69 billion consensus, while cash flow from operations reached $7.2 billion. After $3 billion of capital spending, free cash flow totaled $4.2 billion. The company returned $3 billion to shareholders, doubling share repurchases to $2 billion and paying $1 billion in ordinary dividends, and ended the quarter with $8.1 billion in cash and short-term investments.

Metric	Actual	Consensus	Beat/Miss
Revenue	$18.64B	$18.69B	-0.3%
EPS	$3.24	$2.85	+13.7%
Production	2.248M BOE/d	guidance high	above range

Production of 2.248 million barrels of oil equivalent per day topped the high end of guidance, with the Permian Basin setting a company record above 900,000 BOE/d. The company achieved its $5 billion disposition target ahead of schedule, expanded LNG offtake to 12 million tons per annum, and signed low-cost supply agreements in Iraq and Syria.

Shares rose 1.5 percent to close at $116.76, still below the 52-week high of $135.87. Management kept full-year capital spending guidance unchanged at $12 billion to $12.5 billion and reiterated a plan to double free cash flow to about $7 billion by 2029, as Willow reaches first oil in early 2029 and capital outlays decline.

The earnings beat and record Permian output give incoming CEO O'Brien a strong foundation, though the leadership transition and ongoing disruption in Qatar, where Ras Laffan was largely shut in during the quarter, add execution risk. Investors will watch third-quarter production guidance of 2.29 million to 2.32 million BOE/d, which assumes a Qatar ramp, when the company reports next quarter.

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