Expand Energy exceeds its quarterly profit expectations and expects minimal tariff impact

Expand Energy, the top U.S. producer of natural gas, beat analysts' expectations for first-quarter profits on Tuesday. This was due to higher natural gas production and prices, as well as a signal that tariffs will have a minimal impact in the near future.

In extended trading, shares were up about 1 percent at $108.50.

The average natural gas price has been rising over the last few quarters. On March 10, it reached a record high of two years, supported by record flows into LNG export facilities as well as concerns about supply leading up to summer.

Expand Energy's average realized natural gas price during the third quarter increased by 23.2% over last year, to $3.51 for 1,000 cubic feet (Mcf), and production nearly doubled at 6,254 million cubic feet per day.

Expand Energy (formerly Chesapeake Energy) said in February that it is on track to increase output in 2026 by more than 5 percent from the levels expected in 2020, as long as the market conditions allow for such an action.

The tariffs imposed by U.S. president Donald Trump on trading partners have increased uncertainty in the industry, as there are fears that a trade war on a global scale could crimp energy demand and slow global economic growth.

The natural gas producer, however, said that it expected minimal impact in the near term from tariffs due to a favorable outlook for pricing of services. It added that the long-term effect is dependent on the outcome and the scale of the levies.

According to data compiled and analyzed by LSEG, the Oklahoma City-based firm, which acquired Southwestern Gas for $7.4 Billion to become the largest independent U.S. natural gas producer, posted an adjusted profit per share of $2.02 for the quarter ending March 31 compared to analysts' average estimates of $1.88. (Reporting from Tanay Dhumal, Bengaluru. Editing by Sriraj Kulluvila.)

(source: Reuters)