ConocoPhillips second quarter 2026 earnings explained: segments, adjusted EPS and buybacks

ConocoPhillips reported its second quarter 2026 results on August 6, 2026. That is still its latest quarter with full results. When this article was written on October 31, 2026, its list of filings with the SEC showed no third quarter results, so those are the next report to watch. ^[1][2]

In the three months ended June 30, 2026 ConocoPhillips earned $3,931 million, or $3.23 per diluted share. Leaving out what it calls special items, its adjusted earnings were $3,951 million, or $3.24 per share. A year earlier it earned $1,971 million, or $1.56 per share, and the company says earnings rose from that quarter primarily because of higher prices. This article explains how the company is organised and what each segment earned, then covers production, cash and valuation. Every figure is sourced and dated, and every number worked out by us is labelled as a Dalsna Finance calculation. ^[1][3]

ConocoPhillips in brief

ConocoPhillips calls itself a leading global exploration and production company. Its quarterly report lists what it finds, produces, moves and sells around the world: crude oil, bitumen, natural gas, liquefied natural gas (LNG) and natural gas liquids (NGLs). In the second quarter it was producing in the U.S., Australia, Canada, China, Equatorial Guinea, Libya, Malaysia, Norway and Qatar. The company is based in Houston and its shares trade on the New York Stock Exchange under the ticker COP. ^[1][4]

In the release Ryan Lance, chairman and chief executive at the time, said the quarter brought record production from the company's Permian position. He also said it doubled its quarterly share repurchases and reached its $5 billion asset disposition target ahead of schedule. He added that it remains on track for what it calls a $7 billion free cash flow inflection by 2029. This is our paraphrase of his words. It is the company's own view, and the 2029 figure is a company projection. ^[1]

The board has since chosen a new chief executive. On August 6, 2026 the board elected Andy O'Brien, then executive vice president for strategy and commercial and chief financial officer, as president and chief executive from September 1, 2026. On that date Lance was to retire as chief executive and become executive chair of the board, and Kontessa Haynes-Welsh, the finance vice president and controller, was to become chief financial officer, according to a filing dated August 11. ^[5]

Five regions and a corporate segment

ConocoPhillips reports its results by region. Lower 48, its operations in the U.S. Lower 48 states plus commercial operations, is by far the largest: as of June 30, 2026 it accounted for 69% of consolidated liquids production and 74% of consolidated natural gas production, according to the quarterly report. Its second quarter output of 1,479 thousand barrels of oil equivalent per day (MBOED) included 720 MBOED from the Delaware Basin, 202 from the Midland Basin, 363 from the Eagle Ford and 189 from the Bakken, as reported. ^[4][1]

Alaska's business is primarily finding, producing, moving and selling crude oil, NGLs and natural gas. Canada includes the Surmont oil sands development in Alberta and the Montney play in British Columbia. Europe, Middle East and North Africa covers mainly the Norwegian North Sea and Norwegian Sea, Qatar, Libya, Equatorial Guinea and Syria, plus commercial and terminalling work in the U.K. Asia Pacific has operations in China, Malaysia and Australia. Corporate and Other holds income and costs that do not belong to an operating segment. ^[4]

Qatar matters this year. The quarterly report points to geopolitical tensions in the Middle East, including the conflict involving Iran. It says the company's Qatar LNG investments were not damaged and show no sign of impairment, but their production stayed constrained through the second quarter. Those investments supplied about 4% of total company production in 2025. In April the company left Qatar out of its second quarter production guidance because of that uncertainty. ^[4][6]

What each segment earned

Segment earnings are after tax and add up to net income. Every operating segment earned more than in the first quarter. Lower 48 rose to $2,584 million from $1,403 million and Alaska to $522 million from $294 million. Corporate and Other lost more: $230 million against $159 million. ^[3]

Canada's reported figures include special items. In the second quarter they cut its earnings by $58 million after tax, from pending claims and settlements. In the first quarter they cut it by $122 million, including a loss on remeasuring a contingent liability tied to the Surmont acquisition. Without those items Canada earned $378 million against $207 million. In Corporate and Other the second quarter items added $38 million after tax: a gain on pending claims and settlements and a gain on an interest rate hedge linked to the company's PALNG Phase 1 investment, partially offset by transaction, integration and restructuring costs. ^[3][1]

The numbers, quarter over quarter

Sales and other operating revenues, the company's main revenue line, rose to $19,161 million from $15,761 million. Total revenues and other income, which also counts earnings from equity affiliates, gains on dispositions and other income, came to $19,522 million. Income before income taxes rose to $6,082 million from $3,363 million, and the effective tax rate was 35.4% against 35.1%, as reported. ^[3]

The release explains results against the second quarter of 2025, not the first quarter of 2026. Its total average realized price was $62.33 per barrel of oil equivalent (BOE) in the second quarter, up from $50.36 in the first, as reported. We show these moves without assigning them causes the company did not give. ^[1][3]

Adjusted earnings, a non GAAP measure, remove special items. In the second quarter those items lowered earnings by a net $20 million after tax: costs for transactions, integration and restructuring and for pending claims and settlements, partially offset by the interest rate hedge gain. In the first quarter they lowered earnings by $141 million. Profit margin, profit divided by revenue, is shown below on both bases. ^[1][3]

Earnings per share

Earnings per share, or EPS, is profit divided by the number of shares. The diluted figure also counts shares that could be created from items such as stock options and unvested awards. ConocoPhillips reported diluted EPS of $3.23 for the second quarter and $1.78 for the first. Simply dividing second quarter net income by diluted shares gives $3.24 (Dalsna Finance calculation). The reported figure is lower because the company first takes off $13 million of earnings allocated to participating securities, leaving $3,918 million for common shareholders, according to its quarterly report. ^[3][4]

ConocoPhillips defines adjusted EPS as diluted EPS without special items. It reported $3.24 for the second quarter and $1.89 for the first. Our simple divisions of adjusted earnings by diluted shares come out a cent higher in each quarter, so the reported figures are the ones charted. ^[1][6][3]

Production and prices

Production is measured in MBOED, which counts gas and NGLs alongside oil on one scale. Total production averaged 2,248 MBOED in the second quarter, against 2,309 MBOED in the first. Lower 48 rose to 1,479 MBOED from 1,453 MBOED. Natural gas from equity affiliates, a group that includes the Qatar LNG ventures, fell to 865 million cubic feet a day from 1,166, as reported. ^[1][6][3][4]

Against the second quarter of 2025, production fell 98 MBOED, or 4%, once closed acquisitions and dispositions are adjusted for. The company says organic growth in Lower 48 was more than offset by the effect of the Middle East conflict on Qatar and by higher royalties at Surmont. Benchmark prices moved in different directions: WTI crude averaged $92.79 a barrel against $71.93 in the first quarter, while Henry Hub gas fell to $2.90 per million British thermal units from $5.05. ^[1][3]

Cash, buybacks and debt

Net cash provided by operating activities was $7,434 million in the second quarter, against $4,295 million in the first. ConocoPhillips also reports cash from operations, a non GAAP measure that leaves out changes in working capital, the cash tied up in items such as receivables and payables: $7,176 million. Capital expenditures and investments were $3,024 million. ^[1][3]

The company says it returned $3.0 billion to shareholders in the quarter, $2.0 billion through share repurchases and $1.0 billion through the ordinary dividend. Its cash flow statement shows $2,000 million paid to repurchase common stock, against $1,006 million in the first quarter. As of June 30, 2026 it had repurchased $42.3 billion of stock since 2016 under a program capped at $65 billion, according to the quarterly report. Common shares outstanding fell to 1,201.3 million at June 30 from 1,218.3 million at March 31. ^[1][3][4]

It ended the quarter with cash and short term investments of $8.1 billion and long term investments of $1.2 billion, as reported. Short term and long term debt together came to $23,290 million, little changed from $23,327 million at March 31 (Dalsna Finance calculation for the sums). The board declared a third quarter ordinary dividend of $0.84 per share, payable on September 1, 2026 to stockholders of record on August 17. ^[1][3]

The last four quarters

Over the four quarters to June 30, 2026 net income added up to $9,282 million and adjusted earnings to $9,545 million (Dalsna Finance calculation for the sums). All four quarters are taken from the second quarter 2026 supplemental data, as the company reported them. ^[3]

What the market values ConocoPhillips at

Market capitalization, or market cap, is what the stock market values the whole company at: the share price times the number of shares. ConocoPhillips shares closed at $154.03 on Friday, October 30, 2026, as reported by StockAnalysis. The cover of its second quarter report to the SEC lists 1,201,337,479 shares of common stock outstanding at June 30, 2026, the only share count the cover gives. That gives a market cap of about $185.04 billion (Dalsna Finance calculation). Every multiple and share price below uses this one share count. ^[7][4]

Six valuation multiples

The price to earnings ratio, or P/E, is market cap divided by a year of earnings. It shows how many dollars the market is paying for each dollar of yearly profit. Annualised means one quarter multiplied by four. Second quarter net income of $3,931 million times 4 is $15,724 million, which gives an annualised P/E of 11.8. The adjusted P/E uses adjusted earnings instead: $3,951 million times 4 is $15,804 million, which gives 11.7 (Dalsna Finance calculation). ^[3][7][4]

A trailing P/E, sometimes called a historical P/E, uses the last four reported quarters. On the $9,282 million of net income in the table above it is 19.9, and on the $9,545 million of adjusted earnings it is 19.4 (Dalsna Finance calculation). The trailing figures are higher because earnings in each of the three earlier quarters were lower than in the latest quarter. ^[3][7][4]

A forward P/E uses an estimate of future earnings. ConocoPhillips guides on production, capital and operating costs but gives no earnings guidance in its releases, and we did not use an analyst consensus we could not check against a dated original. So the two forward P/E values are not calculated. ^[1][6]

Two base cases: the second quarter held flat for a year

Suppose sales and other operating revenues stayed at the second quarter's level for a full year, with no growth and no decline: $19,161 million times 4, or $76,644 million. At the second quarter's net margin of 20.5% that gives $15,724 million of net income, or $13.09 per share on the cover share count. At the 20.6% adjusted margin it gives $15,804 million, or $13.16 per share (Dalsna Finance calculation). ^[3][4]

Both cases are simply the latest quarter annualised, so at the matching annualised P/E each returns the October 30, 2026 close of $154.03 by construction. The other cells only show how the price moves when the same earnings are given a different multiple. Each kind of earnings meets its own kind of multiple. ConocoPhillips reports no income from operations line, and its adjusted earnings already leave out the special items it quantified, so there is no separate operating margin case. The arithmetic also holds prices fixed at second quarter levels, such as the realized price of $62.33 per BOE. ^[3][1][7]

The adjusted base case in a chart

Recent deals

At June 30 the company had agreed to sell some noncore Lower 48 assets for about $1.7 billion, with a net carrying value of about $1.5 billion, according to the quarterly report. The release says those sales closed in July, which completed its $5 billion disposition target ahead of schedule. ^[4][1]

In July it agreed to buy a 42% stake from a bp subsidiary in a joint venture it will not operate, which is redeveloping four large producing oil fields in the Kirkuk area of northern Iraq. The purchase price is $0.4 billion before closing adjustments, including $0.2 billion of deferred payments. The company expects to pay $0.3 billion to $0.5 billion in cash at closing, which includes repaying its share of bp's project costs since the July 1, 2026 effective date. It expects the deal to close by the end of 2026, subject to regulatory approvals and other customary closing conditions (company expectations, as reported). In June it also signed an agreement in Syria to raise output from certain gas fields, which it does not expect to have a material effect in 2026. ^[4][1]

Sector comparison

This table sets the second quarter at ConocoPhillips beside seven other large US oil and gas companies, using each company's own reported figures for the three months ended June 30, 2026, though integrated companies, producers and refiners earn money in different ways, so margins are not like for like. Each P/E here divides the October 30, 2026 close by four times the quarter's diluted EPS, so it can differ a little from the market cap based P/E earlier in this article. ^[1][7]

What to watch

The third quarter report will be the first since the leadership change the company set for September 1. In August the company guided to third quarter production of 2.29 million to 2.32 million barrels of oil equivalent per day and left its full year guidance unchanged (company projection, as reported). The report will show whether production landed in that range and whether output from the Qatar investments recovered. ^[1][5][4]

How these figures were made: inputs come from ConocoPhillips' second quarter 2026 earnings release, supplemental data and quarterly report, its first quarter 2026 release and its August 11, 2026 filing on SEC EDGAR. The share price is the dated close named above. Calculations use the figures as filed and are rounded only at the end, with percentages and multiples to one decimal and per share figures and prices to the cent. ^{[1][3][4][6][5][7]}