Key Takeaways
- Q1 adjusted earnings per share reached $1.16, surpassing the Wall Street consensus of $0.98
- Quarterly revenue increased 2.4% to $85.1 billion, exceeding analyst projections of $81.1 billion
- Conflict in the Middle East reduced quarterly output by 6% and resulted in $700 million in undelivered cargo losses
- Quarterly net profit declined to $4.2 billion from $7.7 billion year-over-year — the weakest since early 2021
- CEO Darren Woods emphasized Exxon’s resilience as a “fundamentally stronger company” capable of weathering volatility
Shares of Exxon Mobil (XOM) advanced 0.6% to $155.23 during Friday’s premarket session following the energy giant’s first-quarter earnings report that exceeded analyst expectations.
The shares previously touched all-time peaks near $176 earlier in the year before retreating toward $154. The quarterly results provided a boost to investor sentiment on Friday morning.
Adjusted profit per share registered at $1.16, comfortably surpassing the Street’s $0.98 forecast. Quarterly revenue advanced 2.4% year-over-year to reach $85.1 billion, outpacing the anticipated $81.1 billion.
However, beneath the adjusted metrics, the financial performance reveals additional complexity.
Actual net profit tumbled to $4.2 billion, representing a substantial decline from the $7.7 billion reported in the same period of 2025. This marks the company’s weakest quarterly profit since early 2021.
The decline stems primarily from escalating tensions in the Middle East, which have affected Exxon more significantly than many competitors. Approximately 20% of the company’s hydrocarbon production originates from this volatile region — among the highest concentrations of any major oil producers. By contrast, Chevron indicated that under 5% of its output comes from Middle Eastern operations.
Regional Conflict Hammers Production
Iranian military actions damaged two liquefied natural gas installations in Qatar where Exxon maintains ownership interests. These disruptions slashed first-quarter production volumes by 6% relative to the preceding quarter.
The energy major also absorbed a $700 million charge from shipments that could not be fulfilled due to the regional hostilities. This substantial loss was stripped out of the adjusted earnings calculation.
Additionally, Exxon booked significant losses connected to financial derivatives — an accounting mechanism that compels recognition of paper losses on hedging instruments prior to completion of physical deliveries. CFO Neil Hansen noted these timing-related effects generally reverse themselves within several months, although predicting future impacts remains challenging.
When excluding all timing-related impacts and cargo delivery issues, Hansen indicated that fundamental net income actually expanded compared to the previous year.
Permian and Guyana Operations Remain Strong
Despite headwinds from the Middle East, Exxon’s flagship production assets delivered solid performance.
Output from the Permian Basin maintained its growth trajectory, while Guyana operations achieved record production levels during the three-month period. These two regions represent Exxon’s most valuable upstream portfolios.
Free cash generation totaled $2.7 billion for the quarter, declining from $8.8 billion in the comparable year-ago period. The company distributed $4.3 billion to shareholders through dividends and repurchased $4.9 billion worth of shares during the quarter.
Capital spending reached $6.2 billion, consistent with full-year projections.
Chief Executive Darren Woods stated the quarterly performance demonstrated Exxon was “a fundamentally stronger company than it was just a few years ago, built to perform through disruption and across market cycles.”
Industry analysts are expected to question company leadership about the repair schedule for damaged Middle Eastern facilities during Friday’s earnings conference call.
