{"id":11378,"date":"2026-07-09T15:20:35","date_gmt":"2026-07-09T15:20:35","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=11378"},"modified":"2026-07-09T15:20:35","modified_gmt":"2026-07-09T15:20:35","slug":"exxon-mobil-signals-massive-profit-spike-but-wall-street-is-divided","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=11378","title":{"rendered":"Exxon Mobil signals massive profit spike but Wall Street is divided"},"content":{"rendered":"<p><\/p>\n<p>I covered Chevron CEO Mike Wirth&#8217;s stark warning about oil price pressure building through June and July, and the IEA data showing global inventories drawing down at a record pace.\u00a0<\/p>\n<p>This week, on July 7, ExxonMobil gave investors the first concrete look at what those dynamics are actually worth in dollar terms. The numbers are significant.<\/p>\n<p>According to a Bloomberg report, Exxon (XOM) disclosed on June 7 that it expects a profit increase of approximately $3.7 billion from the crude oil price surge in Q2, plus an additional approximately $3.3 billion in combined refining and chemical margin gains.<\/p>\n<p>Partially offsetting those gains are approximately $1.2 billion in losses from production disruptions in the Middle East caused by the U.S.-Iran war and the closure of the Strait of Hormuz. The company also expects to record approximately $2.6 billion in derivative profits linked to physical cargo deliveries during the quarter, Bloomberg reports.<\/p>\n<p>As of this report, XOM was trading up near $143. The company&#8217;s full quarterly results are scheduled for July 31.<\/p>\n<p><strong>Also Read: Exxon Mobil Corporation Latest News and Stories<\/strong><\/p>\n<h2>Breaking down what Exxon&#8217;s early disclosure actually signals<\/h2>\n<p>The preliminary figures Exxon shared are what the company calls &#8220;sensitivity&#8221; disclosures, not final results. They frame the directional magnitude of Q2 earnings relative to Q1, and that direction is clearly and materially upward.<\/p>\n<p>My read of the moving pieces is this. The approximately $3.7 billion crude price benefit reflects higher average oil prices in Q2 than in Q1, driven by disruptions to Middle East production via the Strait of Hormuz.\u00a0<\/p>\n<p>The approximately $3.3 billion in refining and chemical gains reflects improved crack spreads globally as refinery throughputs were constrained by the shortage of Middle Eastern crude, pushing product prices higher.<\/p>\n<p><strong>More Exxon Mobil Corporation:<\/strong><\/p>\n<ul>\n<li><strong>Exxon (XOM) flashes key signals on New Jersey exit<\/strong><\/li>\n<li><strong>Exxon CEO delivers blunt message on oil prices and the economy<\/strong><\/li>\n<li><strong>Iran peace deal resets gas prices<\/strong><\/li>\n<\/ul>\n<p>The approximately $1.2 billion loss from disruptions in Middle East production is the offset. Exxon has assets in the region that produced less during the quarter, as a result of the conflict. <\/p>\n<p>But the net math is strongly positive: a nearly $7 billion gross positive swing, partially offset by $1.2 billion in direct production losses plus the $2.6 billion derivative gain.<\/p>\n<p>That derivative position is worth pausing on. In Q1 2026, Exxon reported $3.9 billion in unfavorable estimated timing effects from derivatives marked to market, with the associated physical deliveries not yet completed.\u00a0<\/p>\n<p>CEO Darren Woods addressed this directly in the Q1 earnings call, noting those timing effects &#8220;unwind in subsequent periods.&#8221; The $2.6 billion derivative profit in Q2 guidance is partly that unwinding.<\/p>\n<h2>The Q1 2026 foundation and what Woods said about Exxon&#8217;s structural strength<\/h2>\n<p>Exxon&#8217;s Q1 2026 results, reported May 1, provided the baseline against which the Q2 improvement should be measured, according to Exxon\u2019s earnings release.\u00a0<\/p>\n<ul>\n<li>Excluding identified items and timing effects, underlying earnings were $8.8 billion, up from $7.6 billion in the same quarter last year.\u00a0<\/li>\n<li>Generated a one-year total shareholder return of 48% and $9.2 billion in shareholder distributions, delivered record production in Guyana, and achieved first LNG at Golden Pass Train 1.<\/li>\n<\/ul>\n<p>Woods was direct about what the Middle East disruption revealed about the company&#8217;s structural positioning.<\/p>\n<blockquote>\n<p>This quarter demonstrated that ExxonMobil is a fundamentally stronger company than it was just a few years ago, built to perform through disruption and across market cycles.<\/p>\n<\/blockquote>\n<p>Woods continued in the Q1 earnings release. &#8220;The underlying business delivered strong results, reflecting the benefits of the strategy we have consistently executed since 2018.&#8221;<\/p>\n<p>The Q2 setup Exxon has framed supports that thesis. Higher oil prices, improved refining margins, and derivative profits are converging simultaneously.<\/p>\n<p>All of that comes in a quarter; the company&#8217;s production base outside the Middle East is also expected to increase approximately 150,000 oil-equivalent barrels per day compared to Q1, according to Exxon&#8217;s forward guidance presentation.<\/p>\n<figure>\n<p>                        <img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAzMTA2NTMw\/exxon-mobil-ahead-of-earnings-figures.jpg?profile=rss\" height=\"675\" width=\"1200\"><figcaption>The energy sector has recorded the largest percentage increase in estimated earnings of all 11 S&amp;P 500 sectors since March 31, rising 49.8% to $52.1 billion.&nbsp;<\/p>\n<p>Benjamin Fanjoy&amp;sol;Bloomberg via Getty Images<\/p>\n<\/figcaption><\/figure>\n<h2>What the analyst community sees in XOM heading into July 31<\/h2>\n<p>The energy sector earnings revision story has been one of the most dramatic in the market this quarter, honestly.\u00a0<\/p>\n<p>According to FactSet data as of July 2, the energy sector has recorded the largest percentage increase in estimated earnings of all 11 S&amp;P 500 sectors since March 31, rising 49.8% to $52.1 billion.\u00a0<\/p>\n<p>The sector&#8217;s estimated year-over-year earnings growth rate has moved from 48.3% at quarter start to 122.1% today.<\/p>\n<p align=\"center\"><strong>Related: Bank of America sees Exxon differently than oil market<\/strong><\/p>\n<p>Exxon&#8217;s EPS estimate has risen to $3.63 from $2.42 since March 31, according to FactSet, making it one of the largest dollar contributors to the sector&#8217;s earnings upgrade alongside Chevron, Marathon Petroleum, and ConocoPhillips.<\/p>\n<p>Despite that earnings upgrade, the energy sector has seen the largest price decline of all eleven sectors since March 31, falling 14.5%, according to the same note.\u00a0<\/p>\n<p>XOM itself is up 19.64% year-to-date, according to Yahoo Finance, but is pricing in considerable uncertainty about whether the Strait of Hormuz will reopen by the timeline peace negotiators are projecting.<\/p>\n<p>Analyst targets across the Street reflect a wide range of views.\u00a0<\/p>\n<ul>\n<li>Wells Fargo holds the street-high target at $185<\/li>\n<li>Barclays and Bernstein are both at $182.\u00a0<\/li>\n<li>JPMorgan sits at $173.\u00a0<\/li>\n<li>Morgan Stanley at $168.\u00a0<\/li>\n<li>TD Cowen lowered its target to $155 on July 2.\u00a0<\/li>\n<li>Bank of America carries a $154 target.<br \/>\nSource: TipRanks\n<\/li>\n<\/ul>\n<p>The spread from $154 to $185 is a genuine disagreement about how quickly Hormuz reopens, how long elevated oil and refining margins persist, and whether Exxon can translate a war-driven windfall into durable earnings power. July 31 will start answering those questions.<\/p>\n<p align=\"center\"><strong>Related: Oil&#8217;s 4-month low hands Exxon, Chevron a fresh problem<\/strong><\/p>\n<p>#Exxon #Mobil #signals #massive #profit #spike #Wall #Street #divided<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I covered Chevron CEO Mike Wirth&#8217;s stark warning about oil price pressure building through June and July, and the IEA data showing global inventories drawing down at a record pace.\u00a0&hellip; <\/p>\n","protected":false},"author":1,"featured_media":11379,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[2832,496,2700,1492,1558,277,2897,379,1152],"class_list":["post-11378","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-divided","tag-exxon","tag-massive","tag-mobil","tag-profit","tag-signals","tag-spike","tag-street","tag-wall"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11378","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11378"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11378\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/11379"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11378"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11378"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11378"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}