Exxon Mobil 2025 Q2 Earnings Misses Targets as Net Income Drops 23.2%

Exxon Mobil reported its fiscal 2025 Q2 earnings on August 1st, 2025. The company fell short of Wall Street expectations with earnings of $7.1 billion, or $1.64 per share, compared to analyst estimates of $1.56 per share. Despite efforts to bolster production, Exxon Mobil faced challenges due to weaker crude prices and reduced refining margins. The company maintained its guidance for 2025, expecting project start-ups to contribute significantly to earnings in the coming year. Overall, the results highlight the impact of market volatility on Exxon Mobil's financial performance.

Revenue

Exxon Mobil's total revenue decreased 11.8% to $80.94 billion in Q2 2025, compared to $91.73 billion in Q2 2024. The company's upstream operations contributed $5.40 billion, while energy products added $1.37 billion. Chemical products generated $293 million, and specialty products brought in $780 million. The corporate and financing segment saw a loss of $759 million, leading to a corporate total of $7.08 billion.

Earnings/Net Income

Exxon Mobil's EPS fell by 23.4% to $1.64 in Q2 2025 from $2.14 in Q2 2024. Net income also declined 23.2% to $7.35 billion, down from $9.57 billion in the previous year. The drop in EPS reflects challenges in market conditions and lower crude prices.

Price Action

Exxon Mobil's stock price experienced a slight decline of 2.11% on the latest trading day, with a 0.69% decrease over the past week. However, the stock has seen a modest increase of 0.37% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Exxon Mobil shares after quarterly revenue increases and holding them for 30 days produced moderate returns, but it lagged behind market performance. The strategy's compound annual growth rate was 4.88%, significantly underperforming the benchmark by 29.76%. With a maximum drawdown of 0.00% and a Sharpe ratio of 0.19, it indicates low risk but conservative returns. This suggests that while the strategy was relatively safe, it did not offer competitive returns compared to broader market investments. Investors may need to look for alternative strategies or diversify their portfolios to achieve better performance in line with market trends.

CEO Commentary

Darren W. Woods, Chairman and CEO, emphasized Exxon Mobil's strategic strengths, stating, "We built our strategy to take maximum advantage of ExxonMobil's uniquely diversified business across multiple markets and products." He highlighted record production in the Upstream segment, particularly from Guyana, noting it as the industry's most significant oil discovery in the last 15 years. Woods also discussed the role of technology in improving recovery rates, expressing optimism about future growth and efficiency, especially in the Permian Basin.

Guidance

Exxon Mobil anticipates achieving a production capacity of 1.7 million oil-equivalent barrels per day from eight developments in Guyana by 2030. The company expects project start-ups in 2025 to drive over $3 billion in earnings in 2026 at constant prices and margins. They have set a target of $20 billion in additional earnings and $30 billion in cash flow versus 2024 on a constant price and margin basis by 2030.

Additional News

Exxon Mobil is actively pursuing acquisition opportunities to leverage lower oil prices, with a focus on creating additional value rather than merely increasing volume. The company returned $9.2 billion to shareholders in Q2 2025, comprising $4.3 billion in dividends and $5 billion in share repurchases, on track to achieve $20 billion in buybacks by year's end. Major projects like the Singapore Resid Upgrade and Strathcona Renewable Diesel have commenced operations, enhancing ExxonMobil's capacity and product yield. The corporation remains committed to its strategic growth initiatives, aiming to boost shareholder value amid fluctuating market conditions.