What factors drove EXE's earnings surprises in 2024?

Expand Energy (EXE) reported earnings per share (EPS) of $0.55 for the fourth quarter of 2024, surpassing the Zacks Consensus Estimate of $0.53. This represents a significant decline from the $1.31 per share earned in the same quarter of the previous year. Despite the unexpected shortfall, the company's stock has seen a 12.2% increase since the last earnings report, outperforming the S&P 500. Here are the key factors that drove EXE's earnings surprises in 2024:

1. **Strategic Mergers and Integration**: The merger with Southwestern Energy in October 2024 expanded EXE's operational footprint and contributed to improved future prospects. The integration of Chesapeake and Southwestern assets has been a key factor in enhancing production capabilities and cost efficiencies.
2. **Natural Gas Market Dynamics**: The company benefited from strong natural gas fundamentals, including rising demand for natural gas and LNG export capacity growth. Natural gas liquids (NGLs), which make up about 9% of volumes, may have reached their highest price parity to West Texas Intermediate (WTI) crude oil since 2022.
3. **Production and Operational Efficiency**: Expand Energy has demonstrated robust performance, driven by strategic investments and operational efficiencies. The company's focus on capitalizing on productive capacity and efficiency improvements has been a key factor in its financial performance.

In conclusion, EXE's earnings surprises in 2024 can be attributed to strategic mergers and integration, favorable natural gas market dynamics, and strong production and operational efficiency. These factors, combined with analyst optimism and estimate revisions, have contributed to the company's positive stock momentum and potential for continued growth.