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SM Energy (SM) Stock Up 6.3% Since Q3 Earnings Beat Estimates

SM Energy Company’s SM shares have gained 6.3% since it reported strong third-quarter 2022 earnings on Nov 3, after the closing bell.

SM Energy’s third-quarter adjusted earnings of $1.82 per share beat the Zacks Consensus Estimate of $1.77. The bottom line significantly improved from the year-ago earnings of 74 cents per share.

Total quarterly revenues of $835 million increased from $760 million in the year-ago quarter and beat the Zacks Consensus Estimate of $700 million.

The strong quarterly results were driven by higher realizations of commodity prices.

SM Energy Company Price, Consensus and EPS Surprise


SM Energy Company Price, Consensus and EPS Surprise
SM Energy Company Price, Consensus and EPS Surprise

SM Energy Company price-consensus-eps-surprise-chart | SM Energy Company Quote

Operational Performance:


SM Energy’s third-quarter production totaled 137.8 thousand barrels of oil equivalent per day (MBoe/d) (46% oil), down 11.6% from the year-ago level of 155.8 MBoe/d.

Oil production of SM Energy declined 29.6% year over year to 61.7 thousand barrels per day (MBbls/d). The company produced 336.5 million cubic feet per day of natural gas in the quarter, up 6.4% year over year. Natural gas liquids contributed 20.1 MBbls/d to the total production volume, up 29.7%.

Realized Prices

Before the effects of derivative settlements, the average realized price per Boe was $65.27 compared with $53.02 in the year-ago quarter. The average realized price of natural gas increased 48% year over year to $7.58 per thousand cubic feet. Average realized oil prices increased 34% to $92.66 per barrel, and that of natural gas liquids declined 1% to $36.36 per barrel.

Costs & Expenses

On the cost front, unit lease operating expenses of SM Energy increased 34% year over year to $5.64 per Boe. General and administrative expenses increased 26% to $2.24 per Boe from the prior year's $1.78. Also, transportation expenses increased to $2.87 per Boe from $2.41.

Total hydrocarbon production expenses of SM Energy in the quarter were $160 million compared with the year-ago level of $135.7 million. Total exploration expenses were $14.2 million, higher than the year-ago figure of $8.7 million.

Total operating expenses in the third quarter declined to $213.2 million from the year-ago period’s $634 million.


The capital expenditure of SM Energy in the September-end quarter was $226.1 million. It generated an adjusted free cash flow of $177.9 million in the reported quarter.

Balance Sheet

As of Sept 30, 2022, SM Energy had cash and cash equivalents of $498.4 million. It had net debt of $1,086.7 million at the third-quarter end.


For 2022, SM Energy’s total production is expected to be 52.5-53 MMBoe, with a proportion of oil of 46%.

The upstream firm’s capital expenditure guidance is $870-900 million for the year. It expects exploration expenses of $55 million for 2022. Lease operating expenses are estimated to be $5.10-$5.15 per barrel of oil equivalent.

For the fourth quarter, SM Energy expects to incur a capital expenditure of $228-$258 million. The company expects production of 12.7-13.2 MMBoe for the fourth quarter, with an oil proportion of 44%.

Zacks Rank & Stocks to Consider

SM Energy currently carries a Zacks Rank #4 (Sell).

Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

W&T Offshore, Inc. WTI reported third-quarter 2022 adjusted earnings (excluding one-time items) of 33 cents per share, beating the Zacks Consensus Estimate of 28 cents. Strong quarterly results were driven by higher production and the realization of commodity prices.

W&T Offshore is expected to see earnings growth of 747.8% for 2022. For 2022, WTI reduced its capital spending budget to $65-$75 million from the prior $70-$90 million.

Phillips 66 PSX reported third-quarter 2022 adjusted earnings per share of $6.46, comfortably beating the Zacks Consensus Estimate of $4.98. Strong quarterly earnings were driven by robust refining margins worldwide.

Phillips 66’s board of directors recently authorized a $5-billion increase to its stock repurchase program, bringing the total share repurchases authorized since 2012 to $20 billion. This represents Phillips 66’s strong focus on returning capital to stockholders.

Patterson-UTI Energy PTEN reported a third-quarter 2022 adjusted net profit of 28 cents per share, beating the Zacks Consensus Estimate of a profit of 19 cents. The outperformance was driven by solid segmental performances.

In good news for investors, Patterson-UTI doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. The dividend will be paid out on Dec 15, 2022, to shareholders of record as of Dec 1, 2022. PTEN also increased its share repurchase authorization to $300 million.

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