Hess Corporation (HES +0.00%), a global exploration and production company, released its earnings report on April 30, 2025, for the first quarter. The company reported earnings per share of $1.81 (Non-GAAP) for Q1 2025, outperforming Wall Street's estimate of $1.64. Revenue for Q1 2025 was $2.938 billion (GAAP), above the estimated $2.762 billion. Despite outperforming expectations, Hess's net income fell sharply from $972 million in Q1 2024 to $430 million in Q1 2025. High operational costs and declining oil prices were the main challenges, overshadowing an otherwise commendable Q4 2024.
NYSE: HES
Key Data Points
Overview of Hess Corporation
Hess Corporation is a leading player in the oil and gas sector with notable exploration and production operations worldwide. The company is recognized for its strategic growth initiatives, especially in Guyana where it continues to explore lucrative oil reserves. Of particular importance is its Stabroek Block, a key growth platform, where several projects, including the Yellowtail, are under development.
Recently, Hess has focused on expanding its reserves and production capacities through strategic projects and mergers. Additionally, the merger agreement with Chevron, entered into on October 22, 2023, underscores its efforts to strengthen its market position, potentially transforming its operational and financial landscape.
| Metric | Q1 2025 | Q1 Estimate | Q1 2024 | Y/Y Change |
|---|---|---|---|---|
| Earnings Per Share (Non-GAAP) | $1.81 | $1.64 | $3.16 | (42.7 %) |
| Revenue (in billions) | $2.91 | $2.76 | $3.31 | (4.8 %) |
| Net Income (in millions) | $430 | N/A | $972 | (55.8 %) |
| Oil Production – Bakken (in boepd) | 195,000 | N/A | 190,000 | +2.6 % |
| E&P Capital and Exploratory Expenditures (in millions) | $1.085 | N/A | $927 | +17.0 % |
Source: Analyst estimates for the quarter provided by FactSet.
First-Quarter Highlights
The first quarter of 2025 marked significant strides for Hess, as underscored by several notable developments. Earnings per share (Non-GAAP) for Q1 2025 were reported at $1.81, surpassing the analyst estimate of $1.64. This positive variance is attributed to efficient production strategies and effective sales in key sectors. Revenue also surpassed expectations, reaching $2.938 billion (GAAP) compared to the forecasted $2.762 billion for Q1 2025.
Yet, Hess experienced a year-over-year decline in net income, dropping from $972 million in Q1 2024 to $430 million in Q1 2025. Factors contributing to this decline included a significant drop in the average realized crude oil price, which fell to $71.22 per barrel—down from $80.06 last year.
In Q1 2025, Guyana operations stood out with net production reaching 183,000 barrels per day. The region's growth is central to Hess's operations, bolstered by ongoing expansions like the Yellowtail project. This project is anticipated to significantly enhance production capacity by late 2025.
Hess's In the United States, the Bakken field recorded stable production growth, with output increasing from 190,000 to 195,000 barrels of oil equivalent per day in Q1 2025 compared to the prior-year quarter. This increase came despite challenging weather conditions earlier in the year.
Looking Ahead
The future outlook for Hess hinges heavily on its strategic operations and the anticipated Chevron merger. While management did not provide specific forward guidance, the strategic prospects tied to Guyana and the merger suggest robust growth potential. Investors should watch production metrics closely, particularly the expected increase in production rates for Guyana as new projects come online.
However, ongoing challenges such as market volatility and rising operational costs will require Hess to maintain operational efficiency and cost management rigorously.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
