ConocoPhillips (ConocoPhillips (COP)) kicked off the year with a solid beat. The oil giant reported first-quarter 2026 earnings that topped analyst expectations, even as profits slipped from a year ago. Adjusted earnings came in at $1.89 per share, comfortably above the $1.64 consensus. Revenue hit $16.054 billion, also ahead of the $15.548 billion analysts were looking for.
But the headline numbers only tell part of the story. On the earnings call, CEO Ryan Lance didn't waste time getting to the big-picture issue weighing on everyone's mind: the ongoing Middle East conflict.
Earnings Snapshot
Net income for the quarter was $2.2 billion, or $1.78 per share, down from $2.8 billion, or $2.23 per share, in the same period last year. The decline reflects lower realized prices and slightly lower production. Total production fell by 80,000 barrels of oil equivalent per day (MBOED) to 2.3 million BOE per day. Excluding acquisitions and divestitures, production was down 1%, or 14 MBOED.
In the Lower 48, production reached 1,453 MBOED, with the Delaware Basin contributing 698 MBOED, the Midland Basin 200 MBOED, the Eagle Ford 367 MBOED, and the Bakken 183 MBOED. The average realized price was $50.36 per barrel of oil equivalent, down 6% from a year earlier.
Shareholder Returns
ConocoPhillips declared a second-quarter dividend of 84 cents per share, payable June 1 to shareholders of record as of May 11. The company also bought back $1.0 billion of its own shares during the quarter, and management signaled that repurchases will likely pick up in the current quarter.
Projects and Updates
The much-watched Willow project in Alaska is now about 50% complete, with construction moving along steadily. The company also secured a third-party tolling agreement in Equatorial Guinea, which extends its LNG operations into the next decade.
Lance Flags Middle East Turmoil As Key Risk
CEO Ryan Lance opened the earnings call by addressing the Middle East conflict directly, expressing concern for employees, partners, and affected communities. He noted that supply disruptions and heightened volatility are rippling beyond energy markets into the broader global economy.
Lance framed such volatility as an inevitable part of the industry, but stressed that the current situation underscores the critical importance of U.S. and global energy security. He expressed hope for a swift diplomatic resolution that restores stability, protects U.S. interests, and reopens global commerce.
Outlook
For the second quarter, ConocoPhillips expects production between 2.185 million and 2.215 million BOE per day, and it reaffirmed full-year guidance of 2.295 million to 2.325 million BOE per day. The company plans to add one rig in the Permian Basin in the second half of 2026.
Management said the Middle East conflict's impact on its portfolio has been limited to QatarEnergy's N3 project, with the rest of the operations unaffected. The company remains on track to achieve a $1 billion run-rate cost savings target by the end of 2026.
On the demand side, ConocoPhillips expects global oil demand to be broadly flat year over year, with potential downside risk tied to ongoing Middle East tensions. Capital expenditures for 2026 are projected at $12 billion to $12.5 billion, reflecting uncertainty around the macro environment and the timing of the North Field East and North Field South projects in Qatar.
Shares of ConocoPhillips were down 1.57% at $126.24 at the time of publication on Thursday.
