Equinor ASA (NYSE: EQNR) experienced a decline in its stock price on Wednesday following the release of its fourth-quarter fiscal 2025 earnings report. The company revealed adjusted revenues of $25.26 billion for the quarter, reflecting a year-over-year (Y/Y) decrease of 4%. Despite this decline, the reported revenue surpassed the consensus estimate of $20.17 billion, indicating stronger-than-anticipated sales performance amid challenging market conditions.
Adjusted operating income for the quarter fell 22% compared to the previous year, registering at $6.20 billion. This reduction was primarily attributed to lower prices for liquid hydrocarbons. Segment results showed adjusted operating income of $5.03 billion from Exploration & Production (E&P) Norway, $214 million from E&P International, and $359 million from E&P USA, illustrating the company's diverse geographical revenue streams.
Equinor’s adjusted earnings per share (EPS) came in at 81 cents, surpassing the consensus forecast of 63 cents. The company generated operating cash flow, after taxes, of $3.31 billion during the quarter, reflecting solid liquidity management. Furthermore, organic capital expenditures amounted to $3.29 billion for the quarter and totaled $13.1 billion for the full fiscal year.
Production and Market Metrics
In terms of output, Equinor reported a significant increase in production volumes during the quarter. Total equity liquids and gas production reached 2,198 thousand barrels of oil equivalent (mboe) per day, marking a 6% increase from the prior year. Equity gas production rose by 9% Y/Y to 1,120 mboe per day, representing a 13% increase over the same period.
This production growth was primarily driven by elevated output from the Norwegian Continental Shelf (NCS) and notable contributions from the E&P USA segment. Conversely, production from E&P International declined due to strategic exits from Nigeria and Azerbaijan and the divestiture of a 40% stake in Brazil’s Peregrino field, impacting overall international production figures for 2025.
Market price movements included a 14% reduction in the group’s average liquids price, which fell to $58.60 per barrel year-over-year. Conversely, the realized piped gas price in the United States increased by 39% Y/Y to $3.29 per million British thermal units (MMBtu), highlighting regional price variability.
Renewable energy efforts resulted in a total power generation of 1.18 terawatt-hours (TWh) from Equinor’s renewable portfolio during the quarter, underscoring the company’s commitment to diversified energy production.
Management Commentary and Strategic Outlook
Anders Opedal, President and CEO of Equinor ASA, highlighted the company’s performance and strategic direction: “With new fields on stream and strong operations, we deliver record-high production and competitive returns in 2025. We continue to allocate capital to further develop and maximise value from the Norwegian continental shelf.”
He further emphasized focused growth in the international oil and gas portfolio and the development of the integrated power business through the execution of projects already sanctioned. The company anticipates approximately 3% production growth in 2026, building on the record production levels from 2025. Additionally, Equinor is undertaking measures to bolster free cash flow, sustain robustness against lower commodity prices, and maintain a competitive capital distribution policy.
Capital Allocation and Shareholder Returns
For the fourth quarter of 2025, Equinor proposed a cash dividend of 39 cents per share, marking a 2-cent increase compared to the preceding quarter. Shares will trade ex-dividend starting May 13, 2026.
Looking ahead, Equinor announced the commencement of the first tranche of its 2026 share buyback program scheduled to begin on February 5, 2026. This initial phase will involve repurchasing shares worth up to $123.75 million, increasing to a total of $375 million when accounting for shares redeemed from the Norwegian State. The tranche is expected to conclude by March 30, 2026.
Overall, the company plans a comprehensive share repurchase initiative totaling up to $1.5 billion for the year 2026, inclusive of transactions involving the Norwegian State’s holdings.
Forward-Looking Projections
Equinor intends to invest approximately $13 billion in organic capital expenditures throughout 2026, aligning with its commitment to sustaining and enhancing production capabilities. The company expects oil and gas production to increase by roughly 3% on a year-over-year basis.
The firm reaffirmed its objective to maintain unit production costs among the top quartile within its global peer group, underscoring operational efficiency. Planned maintenance activities are projected to reduce equity production by approximately 35,000 barrels of oil equivalent per day across the full year.
Market Reaction
Following these disclosures, Equinor’s share price was reported at $26.16 during premarket trading on Wednesday, reflecting a decline of 0.68%, according to Benzinga Pro data.
Key Points
- Equinor’s adjusted revenue declined 4% Y/Y to $25.26 billion in Q4 fiscal 2025 but exceeded analyst expectations.
- Operating income decreased 22% Y/Y to $6.20 billion, influenced by lower liquids prices, while EPS of 81 cents surpassed consensus estimates.
- Production volumes increased significantly, driven by strong output from the Norwegian Continental Shelf and U.S. operations, despite divestitures internationally.
- The company announced an increased quarterly dividend and initiated a $1.5 billion share buyback program for 2026.
Risks and Uncertainties
- Lower average liquids prices negatively impacted operating income and revenue.
- Production reductions due to planned maintenance and divestments in international assets could adversely affect output.
- Potential volatility in global energy markets may challenge maintaining robust free cash flow and capital distribution strategies.
- Dependency on commodity prices, which remain subject to fluctuation, represents an ongoing risk to financial performance.