Hess Midstream 2025 Q2 Earnings Net Income Grows 12.1%

Hess Midstream (HESM) reported fiscal 2025 Q2 earnings on August 6, 2025, delivering results that reflect strong operational performance. The company’s net income increased 12.1% year-over-year to $179.70 million, and its earnings per share (EPS) rose 25.4% to $0.74, surpassing the prior year’s $0.59. The company maintained profitability for the sixth consecutive year in the period and provided guidance consistent with its long-term financial goals.

Revenue
Hess Midstream’s total revenue from contracts with customers reached $413.50 million in the second quarter, driven by robust performance across its midstream segments. Oil and gas gathering services contributed $185.90 million, while processing and storage services added $152.30 million. Terminaling and export services generated $33.10 million, and water gathering and disposal services contributed $34 million. The company also reported $8.20 million in third-party services and $700,000 in other income, bringing total revenues to $414.20 million.

Earnings/Net Income
Hess Midstream’s earnings per share (EPS) increased 25.4% to $0.74 in Q2 2025, up from $0.59 in the same period in 2024, reflecting strong execution and cost discipline. Net income rose 12.1% to $179.70 million, demonstrating the company’s ability to generate consistent profitability and support long-term shareholder value.

Price Action
Following the earnings report, the stock price of Hess Midstream has declined by 1.28% during the latest trading day and 2.09% for the week. However, it has gained 10.47% month-to-date, showing some investor optimism amid mixed short-term price performance.

Post-Earnings Price Action Review
A strategy of buying HESM shares when it beat earnings expectations and selling after 30 days would have yielded a 11.90% return. This, however, underperformed the benchmark return of 66.40%, resulting in an excess return of -54.49%. The strategy exhibited a maximum drawdown of 0.00%, a Sharpe ratio of 0.27, and a volatility of 9.42%, highlighting the risks and limitations of a simple post-earnings trading approach.

CEO Commentary
Jonathan Stein, Hess Midstream’s CEO, emphasized the company’s continued focus on capital return to shareholders through repurchase transactions. These efforts, he noted, have reinforced Hess Midstream’s financial flexibility, allowing for more than $1.25 billion in available capital through 2027. The repurchases are expected to drive higher distributable cash flow per Class A share, supporting distribution growth above the annual target of at least 5% over the next few years.

Guidance
Hess Midstream expects to maintain strong financial flexibility, supporting incremental shareholder returns through potential unit and share repurchases. The company anticipates continued growth in cash flow, with the unit repurchase transaction set to close on August 8, 2025, and final settlement of the ASR transaction expected in September 2025.

Additional News
Recent developments indicate a continued focus on capital efficiency and shareholder returns. Hess Midstream has been actively repurchasing and canceling shares and units, strengthening its balance sheet and enhancing per-unit economics. These repurchase initiatives are a key part of the company’s capital allocation strategy and are expected to continue into 2026. The company remains committed to its long-term financial framework, with no announced M&A activity or C-level changes reported in the immediate period. The buyback activity is aligned with the firm’s objective of maximizing shareholder value while maintaining a strong credit profile and ample liquidity.