ConocoPhillips (NYSE: COP) earned net income of $3.93B in the second quarter ended June 30, 2026, higher than a year earlier, as its margins widened sharply and its crude oil revenue rose. The shares closed at $154.03 on Oct. 30, 2026, close to the top of their 52-week range, and the next report is due Nov. 5, 2026. This piece uses COP to look at "operating leverage" in oil: when revenue rises, profit can grow faster than revenue if many costs stay fixed. The data shows profit growing faster than revenue here, but it does not show why.
Figures are current as of Oct. 30, 2026 and cover the quarter ended June 30, 2026, the latest reported quarter, unless stated otherwise.
Key facts
- Q2 FY2026 (quarter ended June 30, 2026): revenue was $19.16B, up 36.8% from the year-ago quarter. Net income was $3.93B, up 99.4%.
- Earnings report, Aug. 6, 2026: EPS of $3.24 beat the analyst estimate of $2.90. Revenue of $19.52B beat the estimate of $18.79B.
- Next report, Nov. 5, 2026: analysts estimate EPS of $3.05 and revenue of $18.57B for the quarter ended Sept. 30, 2026.
- Share price, Oct. 30, 2026: $154.03, up 2.67% on the day. The 52-week range is $85.57 to $154.28.
- Free cash flow, Q2 FY2026: $4.41B, the highest of the latest 5 quarters.
- Stock Expert AI MoonshotScore V2: 77.6, rated Strong.
| Metric | Q2 FY2026 | Q2 FY2025 (year-ago) | |---|---|---| | Revenue | $19.16B | $14.00B | | Operating income | $5.98B | $2.61B | | Net income | $3.93B | $1.97B | | Diluted EPS | $3.23 | $1.56 | | Operating margin | 31.2% | 18.6% |
Operating margin is the share of each sales dollar left after the costs of running the business, before interest and taxes.
What happened
FMP, our data provider, lists crude oil as ConocoPhillips' largest product line, which makes its results sensitive to commodity prices.
The second quarter shows profit growing faster than sales. Revenue rose by more than a third from a year earlier, but net income roughly doubled, and operating income more than doubled. Gross margin, the share of sales left after direct production costs, was 36.7% in the quarter, compared with 25.1% a year earlier. Operating margin was 31.2%, compared with 18.6%.
A general explanation is fixed-cost leverage: if many costs do not rise with sales, extra revenue can fall largely to profit. That may be a factor for COP, but the data here does not confirm it. FMP does not split the change between price and volume or break out costs, and we did not have the call transcript for this piece. So we cannot say how much came from each. What the segment data does show:
- Crude oil is the largest product line, and its revenue was higher than a year earlier.
- Natural gas revenue was lower than a year earlier, so it did not drive the gain.
- Geography: the Lower 48 US states brought in $13.03B of revenue in the quarter. Europe contributed $2.28B, Canada $1.93B, Alaska $1.87B, and Asia Pacific and the Middle East $674.0M.
| Quarter ended | Revenue | Operating margin | Net income | Free cash flow | |---|---|---|---|---| | June 30, 2025 | $14.00B | 18.6% | $1.97B | $199.0M | | Sept. 30, 2025 | $15.03B | 18.3% | $1.73B | $3.01B | | Dec. 31, 2025 | $13.39B | 13.1% | $1.44B | $1.29B | | March 31, 2026 | $15.76B | 21.5% | $2.18B | $1.35B | | June 30, 2026 | $19.16B | 31.2% | $3.93B | $4.41B |
Margins slid through the end of 2025, then rose in each of the last 2 quarters. Free cash flow, which is cash from operations minus capital spending, did not move in step: it was lowest in the June 2025 quarter at $199.0M, jumped to $3.01B in the September 2025 quarter even as operating margin slipped, fell to $1.29B and $1.35B in the next two quarters, then reached $4.41B in the latest. Capital spending stayed near $3B every quarter, while operating cash flow rose to $7.43B in the latest quarter.
The company put much of it to work. In Q2 FY2026 it spent $2.00B on share buybacks and $1.02B on dividends. In the March 2026 quarter, buybacks were $1.04B.
Why it matters for investors
Valuation against peers. On a trailing 12-month basis, COP trades at a price-to-earnings ratio (share price divided by per-share profit over the past year) of 20.37. Here is how peers compare:
| Company | P/E | Net margin | |---|---|---| | ConocoPhillips (COP) | 20.37 | 14.7% | | BP | 24.38 | 2.5% | | Cenovus Energy (CVE) | 12.68 | 12.4% | | Chevron (CVX) | 17.18 | 11.9% | | Eni (E) | 10.40 | 8.7% |
COP has the highest net margin in this group, and it is priced above Chevron, Cenovus and Eni on earnings. Other measures for COP: enterprise value to EBITDA of 7.31, price to free cash flow of 18.39, and a dividend yield of 2.2%.
Balance sheet. At June 30, 2026, COP held $7.69B in cash and short-term investments against total debt of $23.29B. FMP separately reports net debt of $16.72B. Debt-to-equity was 0.36. Its Piotroski score, a 0-to-9 gauge of financial health, was 9, and its Altman Z-score, a bankruptcy-risk measure, was 3.70.
Analysts. Of 52 ratings, 1 is strong buy, 38 are buy, 10 are hold and 3 are sell, for a consensus of Buy. The average price target is $156.62 and the median is $157.00. Targets run from a low of $130.00 to a high of $189.00. The stock closed at $154.03, so it trades close to the average target. Recent rating actions were all maintained ratings: Susquehanna on Oct. 20, Morgan Stanley on Oct. 15, and Truist Securities and Jefferies on Oct. 7. FMP's own discounted cash flow model gives $348.90 per share, but that is a model output that depends heavily on its assumptions, and it sits far from where analysts set targets.
Our MoonshotScore. Stock Expert AI's MoonshotScore V2 is 77.6, rated Strong. Its pillars, scored relative to the sector, are:
- Safety: 92, the strongest pillar, matching the balance sheet data above.
- Momentum: 89, reflecting the share price near its high.
- Quality: 62.
- Valuation: 56.
- Growth: 45, the weakest. This is a producer whose profit is tied to commodity prices, and the score does not show a steady growth engine.
What could go wrong.
- Commodity prices. If fixed-cost leverage helped lift profit, it can work in reverse too. The margin drop in the quarter ended Dec. 31, 2025 shows how fast margins can turn.
- Expectations. The stock is priced near the average analyst target, which leaves less room for disappointment.
- A tough comparison. Q2 FY2026 was the strongest quarter in the data set, and analysts estimate lower EPS and revenue for the quarter ended Sept. 30, 2026.
- Insiders. Among recent Form 4 filings in the last 90 days, there were 0 open-market purchases and 2 sales. Insider selling is common and not a signal on its own, and FMP notes that older filings in the window may be missing, so this count may be incomplete.
- Weak pillars. Growth and valuation are the lowest-scoring areas in our model.
What to watch next
- Nov. 5, 2026: the report for the quarter ended Sept. 30, 2026. The analyst estimates are EPS of $3.05 and revenue of $18.57B. Last time, the company beat on both.
- Margins: whether operating margin holds near the level from the June quarter or falls back toward the range of the prior quarters.
- Free cash flow and returns: whether buybacks stay above $1B a quarter, and whether free cash flow covers both buybacks and the dividend.
- Product mix: whether natural gas revenue stabilizes while crude stays the main driver.
- Debt: whether FMP's reported net debt moves from $16.72B as cash builds.
Frequently asked questions
Q: Why did ConocoPhillips' profit rise so much more than its revenue in Q2 2026?
The data shows operating income, net income and margins rising faster than revenue. In the quarter ended June 30, 2026, revenue rose 36.8% from a year earlier, while net income rose 99.4% and operating margin went from 18.6% to 31.2%. Crude oil revenue was higher. A general explanation is that when many costs do not rise with sales, extra revenue can fall largely to profit, but FMP data does not break out costs or how much came from price versus volume, so we cannot say that this was the cause for COP.
Q: When does ConocoPhillips report earnings next, and what do analysts expect?
ConocoPhillips is scheduled to report on Nov. 5, 2026, for the quarter ended Sept. 30, 2026. Analysts estimate EPS of $3.05 and revenue of $18.57B. On Aug. 6, 2026, it reported EPS of $3.24 against an estimate of $2.90.
Q: Is ConocoPhillips stock expensive compared with Chevron, BP and Eni?
By trailing earnings, it is priced above Chevron, Cenovus and Eni, and below BP. COP's P/E is 20.37, against 17.18 for Chevron, 24.38 for BP, 12.68 for Cenovus and 10.40 for Eni. COP also has the highest net margin of the group at 14.7%. This is information, not advice.
Sources: Stock Expert AI market data and MoonshotScore, with financial data from Financial Modeling Prep (FMP), as of Oct. 30, 2026. Analyst ratings and targets are from third-party analysts reported through FMP. Headlines from outlets such as Zacks and 247WallSt were used for context only.
This is educational content, not investment advice. Past performance does not guarantee future results.