Key Takeaways
- Exxon delivered first-quarter adjusted EPS of $1.16, surpassing Wall Street’s $0.98 projection
- Quarterly revenue increased 2.4% annually to $85.1 billion, exceeding the $81.1 billion forecast
- Geopolitical turmoil in the Middle East reduced quarterly output by 6% and resulted in $700M in undelivered cargo losses
- Reported net income declined to $4.2B from $7.7B year-over-year — the weakest quarterly profit since Q1 2021
- CEO Darren Woods emphasized the company’s enhanced resilience and ability to navigate market volatility
Exxon Mobil (XOM) stock advanced 0.6% to $155.23 during Friday’s premarket session following the energy giant’s first-quarter earnings release that exceeded Wall Street expectations.
Shares had reached all-time peaks of $176 earlier in the year before retreating toward $154. Friday’s financial results provided shareholders with renewed optimism.
Adjusted profit per share reached $1.16, comfortably beating the Street’s consensus forecast of $0.98. Top-line revenue expanded 2.4% year-over-year to $85.1 billion, outpacing analyst expectations of $81.1 billion.
However, digging beneath the adjusted figures reveals a more complicated story.
Reported net income tumbled to $4.2 billion, a steep decline from $7.7 billion during the same quarter in 2025. This marks Exxon’s weakest bottom-line performance since the opening quarter of 2021.
The decline stemmed primarily from escalating tensions in the Middle East, which affected Exxon more severely than many industry peers. Approximately 20% of Exxon’s hydrocarbon production originates from this region — among the highest concentrations of any major oil producers. By contrast, Chevron reported that Middle Eastern operations account for less than 5% of its total output.
Regional Conflict Disrupts Operations
Iranian military actions inflicted damage on two liquefied natural gas installations in Qatar where Exxon maintains equity positions. These disruptions slashed first-quarter production by 6% relative to the preceding three-month period.
The energy company also absorbed a $700 million charge from shipments that couldn’t reach customers due to the conflict. This particular loss was stripped out of the adjusted earnings calculation.
Beyond that, Exxon booked substantial losses related to financial derivatives — an accounting convention that requires recognizing paper losses on hedging instruments before actual physical deliveries occur. CFO Neil Hansen explained these timing differences generally reverse within several months, though predicting future magnitude remains challenging.
When stripping out all timing-related effects and undelivered cargo impacts, Hansen noted that core net income actually expanded versus the prior-year period.
Permian Basin and Guyana Drive Growth
Despite Middle Eastern headwinds, Exxon’s flagship producing regions delivered solid performance.
Permian Basin volumes continued their upward trajectory, while Guyana operations achieved record production levels throughout the quarter. These two regions represent Exxon’s most valuable upstream portfolios.
Free cash generation totaled $2.7 billion for the three-month period, retreating from $8.8 billion in the year-ago quarter. Exxon distributed $4.3 billion to shareholders through dividends and repurchased $4.9 billion worth of shares during this timeframe.
Capital spending reached $6.2 billion, consistent with full-year projections.
CEO Darren Woods commented that the quarterly performance demonstrated Exxon is “a fundamentally stronger company than it was just a few years ago, built to perform through disruption and across market cycles.”
Market observers will likely question management about repair timelines for compromised Middle Eastern facilities during Exxon’s Friday analyst conference call.
