SM Energy Company
Q2 2026 Earnings
GAAP EPS of $4.46 includes a $262 million gain on divestiture activity, a $272 million net derivative gain, $37 million in transaction and integration costs, and related tax effects. Adjusted EPS of $2.19 excludes these items.
Market Reaction
Did SM Beat Earnings? Q2 2026 Results
SM Energy delivered a decisive beat across the board in Q2 2026, its first full quarter following the January closing of its merger with Civitas, with adjusted EPS of $2.19 clearing the $1.95 consensus by 12.04% and marking the company's fifth consecutive quarter of beating EPS estimates. Revenue of $2.16 billion topped expectations by 5.27% and surged 174.6% year over year, a gain almost entirely attributable to the dramatically expanded asset base the Civitas combination created. Adjusted EBITDAX climbed to $1.41 billion from $570 million a year ago, while operating cash flow of $1.10 billion was the strongest quarterly figure the company has recorded. The integration itself is running ahead of schedule, with 95% of the $355 million in targeted run-rate synergies already actioned, and full-year recurring G&A guidance was trimmed by $50 million at the midpoint to $230 to $250 million. With elevated WTI prices providing a favorable pricing backdrop, SM also raised its second-half production outlook to 435 to 440 MBoe per day and narrowed full-year guidance to 418 to 423 MBoe per day.
- First full quarter of combined operations following January 2026 Civitas merger dramatically expanded production base
- Average net daily production of approximately 440 MBoe/d including approximately 230 MBbl/d of oil
- Oil realized price of $96.85/Bbl before hedges
- 95% of targeted $355 million run-rate merger synergies actioned
- Approximately $70 million severance tax refund recognized in other operating income
- $262 million gain on South Texas Divestiture
- Adjusted EBITDAX of $1.4 billion for the quarter
“Our team delivered strong results in the second quarter, generating significant free cash flow on the strength of our scaled portfolio. In our first full quarter as a combined company, we moved with urgency, actioning 95% of our targeted run-rate synergies, while further strengthening our balance sheet and returning $137 million to stockholders through dividends and share repurchases. With strong performance year-to-date, we today raised second-half 2026 production expectations, reaffirmed full-year capital expectations and reduced our full-year G&A guidance. Our team is focused on disciplined execution – turning scale and asset quality into growing, durable returns for stockholders.”
SM Energy CEO, on the earnings call
Forward Guidance & Outlook
SM raised its second-half 2026 production guidance to 435–440 MBoe/d (approximately 238 MBbl/d of oil), up from 430 MBoe/d. Full-year 2026 production guidance was narrowed to 418–423 MBoe/d (223–225 MBbl/d of oil). Full-year capital guidance was maintained at $2.65–$2.85 billion. Full-year recurring G&A guidance was lowered by $50 million at the midpoint to $230–$250 million, reflecting accelerated integration and full capture of merger-related G&A synergies. The company expects full run-rate synergies to be actioned by year-end 2026. Q3 2026 production is guided at 430–440 MBoe/d (230–240 MBbl/d oil) with capital expenditures of $740–$790 million. Year-to-date transaction and integration costs are $172 million versus full-year guidance of $180 million, with the substantial majority now incurred. Post-quarter redemption of the $417 million 2027 Senior Notes will clear all senior note maturities through mid-2028.
SM YoY Financials
Figures from SEC filings and company reports. Not investment advice.