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SM Energy reported second-quarter revenue of $2.5 billion, above the consensus estimate of $2.0 billion. Adjusted earnings per share were $2.19, also above the consensus of $1.93.
Revenue rose from $793.0 million a year earlier, while diluted earnings per share increased to $4.46 from $1.76. The company said its merger with Civitas increased production and revenue, while its South Texas divestiture also affected comparisons with prior periods. The filing said the quarter included a full quarter of production from the acquired assets, partly offset by the divestiture.
SM Energy said higher benchmark oil prices also contributed to a sequential increase in production revenue. Its filing said gas prices received were negatively affected by local price differentials in the Permian and DJ basins.
Gross margin rose to 77.8% from 71.8% a year earlier, and operating margin increased to 59.8% from 37.2%. SM Energy reported free cash flow of $1.2 billion, compared with $161.0 million a year earlier.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $2.5 billion | $793.0 million | 215.3% |
| Diluted EPS | $4.46 | $1.76 | 153.4% |
| Gross margin | 77.8% | 71.8% | 6.0 percentage points |
| Operating margin | 59.8% | 37.2% | 22.6 percentage points |
| Free cash flow | $1.2 billion | $161.0 million | 673.9% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $2.19 | $1.93 | Beat by 13.5% |
| Revenue | $2.5 billion | $2.0 billion | Beat by 24.5% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
An earnings call for SM Energy was not available, so management’s call commentary and analysts’ questions could not be reviewed.
Guidance
SM Energy’s management guidance is not available for this period, so the company’s current guidance cannot be compared with its previous outlook, including any guidance it may have stopped giving.