Oil and gas producer ConocoPhillips (NYSE:COP) reported Q1 CY2026 results exceeding the market’s revenue expectations, but sales fell by 6.1% year on year to $16.05 billion. Its non-GAAP profit of $1.89 per share was 11.6% above analysts’ consensus estimates.
Is now the time to buy COP? Find out in our full research report (it’s free for active Edge members).
ConocoPhillips (COP) Q1 CY2026 Highlights:
- Revenue: $16.05 billion vs analyst estimates of $14.33 billion (6.1% year-on-year decline, 12.1% beat)
- Adjusted EPS: $1.89 vs analyst estimates of $1.69 (11.6% beat)
- Adjusted EBITDA: $6.47 billion vs analyst estimates of $6.52 billion (40.3% margin, 0.8% miss)
- Operating Margin: 22.2%, down from 27.3% in the same quarter last year
- Oil production: down -4.7% year on year
- Market Capitalization: $153.3 billion
StockStory’s Take
ConocoPhillips’ first quarter results were defined by execution in the face of ongoing geopolitical volatility and a softening in production. Management cited strong capital efficiency in the Lower 48 and key project progress in Alaska, with the Willow project reaching 50% completion despite weather-related challenges. The company’s international operations were impacted by the Middle East conflict, particularly in Qatar, yet robust performance elsewhere offset some of this disruption. CEO Ryan Lance noted, “We continue to advance our strategy and, amid a volatile macro environment, we remain committed to clear, consistent, and durable priorities.”
Looking forward, ConocoPhillips’ strategy is guided by disciplined capital allocation, heightened by the uncertain global supply landscape and LNG market dynamics. Management is focused on maintaining operational efficiency, expanding Permian activity, and capturing value from LNG assets, while acknowledging risks tied to Middle East developments. CFO Andrew O’Brien emphasized, “We remain unhedged in oil and LNG to ensure we capture the price upside, with 40% of our crude production linked to premium markets.” The company also underscored its intent to return 45% of cash from operations to shareholders and to deliver a previously announced $7 billion free cash flow inflection by 2029, supported by cost reduction efforts and major project execution.
Key Insights from Management’s Remarks
Management attributed the quarter’s performance to project execution in Alaska, operational efficiency in the Lower 48, and adaptive responses to global supply disruptions.
-
Alaska project milestones: The Willow project reached 50% completion, with critical winter construction and infrastructure development supporting its timeline. Management views Willow as a foundational contributor to future free cash flow, citing successful hydrocarbon exploration and ongoing appraisal efforts.
-
Operational efficiency in Lower 48: The company maintained capital discipline while improving drilling and completion performance. Notably, enhanced completion efficiencies led to the addition of a Permian rig, ensuring steady-state operations and minimizing operational downtime.
-
LNG portfolio progress: ConocoPhillips extended the life of its Equatorial Guinea LNG facility through a new tolling agreement and made progress at Port Arthur LNG, which is on track for first production next year. Management highlighted its ability to place LNG volumes in premium markets, benefiting from tight supply conditions.
-
Cost reduction initiatives: Operating costs declined, with management confident in achieving $1 billion in run-rate savings by year-end. Both labor and non-labor savings contributed, particularly through lease operating cost reductions and efficiency measures across the portfolio.
-
Portfolio optimization and divestitures: The company remains on track with its $5 billion divestiture program, focusing on non-core asset sales in the Permian and other regions. Management noted strong market interest but reiterated a disciplined approach to maximizing value rather than adhering to a rigid timeline.
Drivers of Future Performance
Management’s outlook is shaped by macro uncertainty, project execution, and disciplined capital allocation, with supply chain volatility and LNG markets as key variables.
-
Macro volatility and supply chain risk: Management believes ongoing disruptions in the Middle East and tight global crude and LNG markets could elevate commodity price floors. However, they caution that further supply shocks or demand rationing could create downside risk, with global oil demand now expected to remain flat year-over-year.
-
Major project execution: The successful progression of the Willow project in Alaska and Port Arthur LNG are critical to achieving long-term growth targets. Management expects these projects to drive significant free cash flow and underpin the company’s $7 billion free cash flow target by 2029, with Willow set for early oil by that year.
-
Capital allocation discipline: The company plans to maintain its commitment to returning 45% of cash from operations to shareholders and will adjust capital spending based on operational efficiency and partner activity in the Permian. Management is monitoring non-operated well activity and adjusting investment in response to market signals and partner ballots.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) progress on Willow project construction milestones and associated exploration results in Alaska, (2) continued operational efficiency gains and capital deployment in the Lower 48, particularly any shifts in Permian activity, and (3) the pace of LNG commercialization and asset utilization, especially as supply chain and geopolitical risks in the Middle East evolve. Execution against cost targets and any updates on divestiture progress will also be critical signposts.
ConocoPhillips currently trades at $125.93, down from $128.25 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
High Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.