Title: ExxonMobil Earnings Narrowly Miss. Why the Stock Is Falling. (Exxon Q2 earnings) Show: Barron's (written article) — Energy Authors: Avi Salzman and Adam Clark Date: 2026-07-31 (Friday; "midday trading Friday") URL: https://www.barrons.com/articles/exxon-earnings-stock-price-653e87c4 Note: Written article — no timestamps. Text pasted by Stephen (barrons.com blocks fetch). Ad/boilerplate lines omitted. Page quote context: XOM -1.57%, CVX +2.08% on the day read.
ExxonMobil shares fell early Friday after the oil company reported second-quarter earnings narrowly short of Wall Street's forecasts.
The oil giant reported quarterly adjusted earnings of $3.52 per share, up from $1.64 a year ago. Total revenue came to $116.02 billion, up from $81.51 billion for the same period a year earlier. As expected, Exxon's earnings and revenue were its highest since Russia's invasion of Ukraine sent commodity prices soaring in 2022.
Analysts had expected Exxon to post earnings of $3.56 a share on sales of $109.9 billion.
The shortfall came in Exxon's refining operations. The refineries were undergoing "elevated" maintenance in the first half of the year, according to Raymond James analyst Justin Jenkins. Still, Exxon pumped out more diesel from its refineries than ever before in the quarter, as the world struggled with a severe shortage of diesel due to the wars in Iran and Ukraine. On the company's earnings call, CEO Darren Woods said he thinks the world's fuel deficit will persist.
"It's going to take a while for the industry to kind of climb its way out of that hole," he said. "And so from our perspective, we think we're going to continue to see a very robust refining market with very high margins."
Exxon is expected to have less refinery maintenance in the second half of the year.
Shares of Exxon were down 2.1% to $153.72 in midday trading Friday.
The stock may be the victim of high expectations, having risen 30% this year so far through Thursday's close. It hit a record high in March and has fluctuated since with developments in the Iran war. Shares have recently rebounded, but some analysts have begun to doubt how long the rally can last. Exxon trades at a premium to Chevron based on its cash flow, even though some analysts think the two stocks now have similar prospects.
Last week, Bank of America analyst Jean Ann Salisbury downgraded Exxon to Neutral from Buy because she expects the stock to lose momentum as the Iran war moves toward a resolution, even if that timing remains uncertain.
Exxon has also been forced to shut in some of its Middle East production, and it remains unclear when it will resume. The company said that its production would be down by 750,000 barrels per day in the Middle East year over year if the Strait of Hormuz remains closed through the third quarter.
There's "limited potential upside given the 20% of currently shut-in volume in the Middle East and unclear forward path in Qatar," Salisbury wrote. Nonetheless, she raised her price target to $158, versus the current price of about $153.
Exxon was also able to whittle away some of its debt, given the cash windfall it's making from the war. The company reported free cash flow for the quarter of $17.2 billion, more than it made in the past three quarters combined. Analysts had expected Exxon to bring in almost $16 billion in free cash flow.
Investors are watching closely to see how Exxon deploys that cash in the future — buybacks, dividend hikes, and acquisitions are all possible, though Wall Street tends to favor the first two more than the third. The company is already advancing more projects in Guyana, one of its fastest-growing areas of exploration.
Write to Avi Salzman at avi.salzman@barrons.com and Adam Clark at adam.clark@barrons.com