Expand Energy Reports $1.229 Billion in Adjusted Operating Earnings for Third Quarter
Key Facts
Expand Energy reported third-quarter results on October 27, posting net income of $519 million and diluted earnings per share of $2.24. Adjusted net income was $338 million, or $1.46 per share, while adjusted earnings before interest, taxes, depreciation and exploration totaled $1.229 billion. Adjusted earnings per share beat analysts’ estimate of $1.31 by $0.15, and revenue of $3.29 billion exceeded their estimate of $2.86 billion. Still, the shares fell 0.9% in extended trading following the announcement Tuesday evening. The results came as the company expanded its marketing activity alongside continued high natural gas production.
Total revenue and other income was $3.286 billion, compared with $2.966 billion in the year-earlier period. Revenue included $1.881 billion from natural gas, oil and natural gas liquids, $927 million from marketing, and $464 million in derivatives gains. Marketing revenue rose from $666 million a year earlier, while related expenses also increased to $888 million from $659 million. The company generated $150 million in adjusted marketing earnings during the nine months ended September 30. It expects $80 million in marketing earnings before interest, taxes and depreciation in the fourth quarter, attributing the outlook to the impact of the Twin Eagle acquisition.
Expand Energy completed its acquisition of Twin Eagle on September 16, for a total purchase price of about $1.4 billion, including purchase price adjustments. The deal was funded with available cash and borrowings, and the company incurred about $22 million in related costs during the quarter. Twin Eagle provides natural gas marketing and logistics services, and the company said the deal expanded its marketing operations in the United States and Canada. The expansion in marketing activity accompanies production operations, with revenue and expenses associated with the activity both higher than a year earlier. The company described its balance sheet as investment grade following the deal, and its leverage ratio was 0.8 times at quarter-end.
Net production was 7.54 billion cubic feet equivalent per day, comprising 6.9 billion cubic feet of natural gas, 17,000 barrels of oil and 87,000 barrels of natural gas liquids per day. Natural gas accounted for 92% of production, underscoring its weight in the company’s mix. The average realized gas price, including realized derivative settlements, was $2.94 per thousand cubic feet, compared with $2.81 a year earlier. The realized oil price rose to $75.97 per barrel from $54.66 in the third quarter of 2025. The company operated an average of 11 drilling rigs, drilled 46 wells and brought 59 wells online during the quarter.
Net cash from operating activities was $1.177 billion, compared with $1.201 billion in the year-earlier quarter. Cash capital expenditures were $838 million, up from $775 million, while accrued capital expenditures were $794 million, compared with $735 million. The earnings presentation reported $311 million in realized hedging gains and adjusted free cash flow of $354 million. On the income statement, operating income declined to $640 million from $725 million, while interest expense fell to $44 million from $57 million. Chief Executive Danny Brown said the company’s scale, diversity and customer access "allow us to capitalize on today’s volatile gas market, provide advantaged supply to premium markets and benefit from the demand growth we expect in the future."
Total debt under accounting standards was $4.632 billion on September 30, while net debt reached $4.656 billion. The company repurchased $305 million of shares during the quarter, bringing buybacks from the start of the year through September 30 to about $900 million, equivalent to 4% of shares outstanding. It said it had an additional $1 billion in repurchase capacity following the quarterly results. It also declared a regular quarterly dividend of $0.575 per share, payable on December 3 to shareholders of record at the close of business on November 12. The company maintained its 2026 outlook for operating 11 to 12 drilling rigs, capital investment of about $3 billion and daily production of 7.45 billion to 7.55 billion cubic feet equivalent.
The company’s shares closed at $94.62 on October 27, after closing at $94.02 on October 26 and $92.67 on October 20. The decline in extended trading after the results announcement was separate from the daily closing prices. The company’s conference call to discuss results and its outlook for the year was scheduled for October 28 at 9 a.m. Eastern time. The company said a replay would be available on its website after the call. The discussion will provide details of the results and annual guidance the company announced to investors.