EQT Corporation Q3 2026: EPS fell 17% to $0.44 as gas volume dropped 8% and prices slipped

EQT Corporation, the largest natural gas producer in the Appalachian Basin, earned $279M in Q3 2026, or $0.44 per diluted share, down 17% from $0.53 a year earlier. Total operating revenue fell 9.6% to $1.77B. Two things drove the decline: EQT sold 8.1% less gas (583 Bcfe against 634 Bcfe, including 21 Bcfe it deliberately held back, or "curtailed", while prices were weak), and the Henry Hub benchmark gas price slipped to $2.96 from $3.07. EQT kept its costs and spending under control. Capital spending of $638M came in 10% below the low end of guidance, and operating cost per unit was at the low end of its range. The same day, EQT announced it will acquire Range Resources, another Appalachian gas producer, and canceled its earnings call.

This report is written from the earnings release (Exhibit 99.1 to the 8-K filed October 27, 2026). The full 10-Q has not been filed yet, so the segment detail and management discussion it contains are not covered here.

The quarter in numbers

Bcfe means billion cubic feet equivalent: gas plus natural gas liquids and oil converted into gas units, with one barrel counted as six thousand cubic feet. Mcfe is one thousand cubic feet equivalent, the unit EQT uses for its prices and costs. Operating margin is the share of revenue left after running the business, before interest and tax.

Price: weaker benchmark, better local discount

Appalachian gas sells below Henry Hub, the US benchmark price, because the region produces more gas than its pipelines can easily carry to other markets. This gap is called "basis" or the differential. In Q3:

Henry Hub fell 3.6%, but EQT's gas price after hedges fell only 2.3%. The differential narrowed by 4 cents, and settled hedges paid $70.5M in cash. The release credits marketing and the curtailment strategy for a differential of $(0.64), better than guidance, even though basis widened during the quarter. Liquids helped at the margin: natural gas liquids excluding ethane sold for $36.73 per barrel, up from $31.82.

The bigger change was volume. Total upstream sales including cash-settled hedges (a non-GAAP measure) fell 9.5% to $1,586M. About eight of those nine and a half points came from selling less. The release says only that the 583 Bcfe includes 21 Bcfe of strategic curtailments. It does not break down the rest of the year-on-year drop.

Costs: per-unit costs up because volume fell

Operating cost per unit rose to $1.09 per Mcfe from $1.00, at the low end of the $1.09–1.23 guidance. According to the release:

• Transmission rose to $0.43 from $0.40 "due primarily to lower sales volume". Pipeline capacity is mostly a fixed cost, so spreading it over less gas raises the cost per unit.
• Gathering rose to $0.09 from $0.06 because more volume was gathered by third parties from wells brought online in Q1 2026.
• SG&A (selling, general and administrative, which is mainly overhead) rose 17.6% to $116M, or $0.20 per Mcfe from $0.16, from "higher long-term incentive compensation costs and higher professional service costs".

Depreciation and depletion fell 7.1% to $640M, roughly in line with volume. Depletion per unit was flat at $0.94.

What the headline numbers hide

• Profit fell less than the business did. Operating income fell 23.8% and pretax income fell 19.5%, but net income attributable to EQT fell only 17.0%. The difference is the tax rate: income tax was 20.1% of pretax income against 24.1% a year earlier. At last year's rate, EPS would have been about $0.415 instead of $0.44. The release does not explain the lower rate.
• A small paper gain from hedges. GAAP profit includes a $100.3M gain on derivatives, but only $70.5M of that was cash received on contracts that settled. The remaining $29.8M is a revaluation of contracts that have not settled yet, which is why adjusted EPS ($0.42) is below GAAP EPS ($0.44). A year ago the non-cash portion was larger ($60.8M), so this item made the year-on-year comparison slightly harder, not easier.
• The prior-year quarter carried one-off costs. Q3 2025 included $29.0M of "other expenses", mostly $21.0M of cash costs for the Olympus Energy acquisition. This quarter's figure was $3.8M. That makes this year's comparison slightly easier.
• Debt paydown is real and recurring. The $37.8M drop in interest expense comes from repaying debt: senior notes fell from $6.93B to $5.22B over nine months. It will keep helping as long as the debt stays down. It is a financing benefit, though, not an improvement in operations.
• Cash conversion is fine. Operating cash flow was $1,083M against net income of $345M. In a gas producer, the large non-cash depletion charge ($640M) explains the gap. Working capital took only $13M this quarter.
• Free cash flow fell faster than profit. Free cash flow attributable to EQT (operating cash flow before working capital, minus capital spending and EQT's share of joint-venture contributions) fell 42% to $283M. Capital spending was $638M against $618M, and contributions to equity-method investments, mainly pipeline joint ventures, rose to $61M from $2M.
• No buyback effect. Diluted shares were 629.2M against 628.3M (+0.1%). The release shows no share repurchases, so none of the EPS change came from the share count. Dividends paid were $309M for the nine months; the cash flow statement in the release covers year-to-date only.

On balance the quarter is mildly flattered: pretax income fell 19.5%, but a tax rate four points lower and a $30M non-cash hedge gain brought the reported EPS decline down to 17%.

Did last time's read hold up?

Our Q2 2026 report flagged three things to watch, and all three played out as described:

• Harder volume comparisons. We expected Q3 volume to fall short of Q2's 634 Bcfe once the Olympus acquisition stopped adding to growth. It did: 583 Bcfe, in the lower half of the 570–620 guidance and down 8.1% from a year earlier.
• Hedge protection. We noted that EQT's collars, with a floor near $3.50, would pay cash if Henry Hub stayed below that floor. Henry Hub averaged $2.96, and settled hedges added $0.12 per Mcf ($70.5M).
• Local basis. Q3 differential guidance was $(0.75) to $(0.65). The actual $(0.64) came in slightly better than the best end of that range.

Takeaway: EQT's 17% EPS decline comes from selling 8% less gas at slightly lower prices. On the controllable items it did well: costs came in at the low end of guidance, capex beat guidance, and interest expense fell 34% as debt fell to $5.6B. But a lower tax rate and a small non-cash hedge gain helped the reported figure, and free cash flow fell 42%. That fall in free cash flow is a better guide to how a weaker gas price is affecting the business than the EPS line is.

Outlook

Guidance for Q4 2026:

• Sales volume of 550–600 Bcfe, including 10–20 Bcfe of strategic curtailments
• A differential of $(0.65) to $(0.55) per Mcf
• Operating costs of $1.14–1.28 per Mcfe, higher than Q3's $1.09, with SG&A guided at $0.23–0.25
• Maintenance capital spending of $540–610M, plus $185–225M of growth capital spending

For full-year 2026, volume guidance is unchanged at 2,375–2,450 Bcfe. Maintenance capex guidance is now $2,020–2,100M, down from $2,040–2,190M in July, and growth capex is unchanged at $580–640M. EQT also raised its dividend 3% to $0.68 per share annualized.

Hedges cover about 1.2 MMDth per day for Q4 with puts (price floors) at $3.72 and calls (price caps) at $5.13. In Q1 2027 the coverage drops to 0.7 MMDth per day, with floors at $3.65. On 25 of those 62 MMDth, EQT has also sold puts at $2.50, so that part of the protection stops if the price falls below $2.50. So if gas prices stay near Q3's levels into winter, less of EQT's revenue will be protected than it was this quarter.

Our read: Q4 per-unit costs will be higher, because guidance implies lower volume and SG&A is guided higher, and the hedge book thins in early 2027. EQT's earnings will therefore depend more on the winter gas price than they have this year. The Range Resources acquisition is the larger open question. The release describes it as creating "America's largest and only vertically integrated natural gas producer" but gives no price, financing, synergy figures or closing date. Until the S-4 registration statement is filed, investors have no figures to judge the deal on, including its effect on the $5.6B debt load that EQT has spent this year paying down.