Exxon Mobil (XOM) Stock: Q1 Earnings Beat Despite Middle East Production Hit

TLDR

• Exxon Q1 adjusted EPS came in at $1.16, beating the $0.98 analyst estimate
• Revenue rose 2.4% year-over-year to $85.1 billion, topping forecasts of $81.1 billion
• Middle East war disruptions cut Q1 production by 6% and caused a $700M undelivered cargo loss
• Net income dropped to $4.2B, down from $7.7B a year ago — its lowest since Q1 2021
• CEO Darren Woods says Exxon is a “fundamentally stronger company” built to handle disruptions

Exxon Mobil (XOM) stock rose 0.6% to $155.23 in premarket trading Friday after the oil major posted better-than-expected first-quarter results.

Exxon Mobil Corporation, XOM

The stock had hit record highs of $176 earlier this year before pulling back to around $154. Friday’s earnings gave investors something to feel better about.

Adjusted earnings came in at $1.16 per share, well ahead of the consensus estimate of $0.98. Revenue climbed 2.4% from a year ago to $85.1 billion, beating expectations of $81.1 billion.

But peel back the adjusted numbers and the picture gets a bit messier.

Net income fell to $4.2 billion, down sharply from $7.7 billion in Q1 2025. That’s Exxon’s lowest net income figure since the first quarter of 2021.

The drop was driven largely by the ongoing conflict in the Middle East, which has hit Exxon harder than most of its rivals. About 20% of Exxon’s oil and gas production comes from the region — one of the highest exposure rates among major oil producers. For comparison, Chevron said less than 5% of its production comes from the Middle East.

Middle East War Takes a Bite

Iranian attacks damaged two liquefied natural gas facilities in Qatar where Exxon holds ownership stakes. The disruptions cut Q1 production by 6% compared to the previous quarter.

The company also took a $700 million hit from cargoes that couldn’t be delivered because of the conflict. That loss was excluded from the adjusted earnings figure.

On top of that, Exxon recorded large losses tied to financial derivatives — an accounting quirk that forces paper losses on hedging contracts before physical deliveries are completed. CFO Neil Hansen said those timing effects typically unwind within a few months, though future impacts are hard to predict.

Excluding all timing effects and undelivered cargoes, Hansen said underlying net income actually grew compared to the prior year.

Permian and Guyana Pick Up the Slack

While the Middle East weighed on results, Exxon’s core assets held up well.

Production in the Permian Basin continued to grow, and Guyana output hit a new record during the quarter. Those two assets are Exxon’s most important upstream operations.

Free cash flow came in at $2.7 billion for the quarter, down from $8.8 billion a year ago. Exxon paid out $4.3 billion in dividends and bought back $4.9 billion in stock during the period.

Capital expenditures totaled $6.2 billion, in line with full-year guidance.

Analysts will likely press executives on the timeline for repairing damaged Middle East assets when Exxon holds its analyst call Friday.

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