Big Oil Companies Report Record Profits Amid High Oil Prices
We are still in the early innings of the earnings season, with roughly a third of S&P 500 companies having returned their second quarter scorecards. And, it’s shaping up to be yet another bumper earnings season: according to FactSet data, 86% of those companies have exceeded Wall Street’s earnings projections while 80% have beaten revenue expectations. The Energy sector is reporting the highest…
In the early days of the earnings season, it appears that many companies are exceeding expectations, particularly those in the energy sector. According to FactSet data, 86% of companies have surpassed Wall Street's earnings projections, while 80% have outpaced revenue expectations. The energy sector is leading the pack with the highest earnings growth at 128.2% year-over-year, significantly outpacing the S&P 500's average growth of 37.9%.
This surge in earnings is largely attributed to the higher oil prices resulting from the Middle East conflict, with Brent crude averaging $92.55 per barrel in the second quarter, a 45% increase from the $63.68 per barrel average in Q1 2026.
Among the top-performing sub-industries, Oil & Gas Refining & Marketing saw a remarkable 249% earnings growth, while Integrated Oil & Gas, Oil & Gas Exploration & Production, and Oil & Gas Storage & Transportation reported 166%, 104%, and 11% growth, respectively. Only Oil & Gas Equipment & Services experienced a decline, with earnings down 16% year-over-year.
Two of the world's largest oil and gas companies, Chevron and ExxonMobil, reported their second-quarter earnings. Chevron, which reported the highest quarterly profits in six years, beat Wall Street's earnings expectations with $6.06 per share, compared to the FactSet consensus estimate of $5.55. Revenue also surpassed projections, reaching $70.06 billion, a 56.2% year-over-year increase.
Chevron's upstream earnings tripled year-over-year, while downstream earnings surged to $4.9 billion, up from $737 million the previous year.
ExxonMobil reported mixed results, with its Non-GAAP EPS missing by $0.11 due to heavy refinery maintenance limiting fuel margin capture and price volatility. However, revenue climbed to $116.02 billion, driven by high oil prices and tight global supply. The company's upstream production reached its highest level in over 20 years, excluding Middle East disruptions, with record output in the Permian Basin surpassing 1.8 million barrels per day.
ExxonMobil also returned $9.4 billion to shareholders in the second quarter, with $4.3 billion in dividends and $5.1 billion in share repurchases. The company highlighted several milestones for its Guyana operations, including the launch of its 5th Floating Production, Storage, and Offloading FPSO vessel, Uaru, which is expected to start production in the fourth quarter of 2026.
ExxonMobil reported that it has recovered its initial $55 billion investment in Guyana two years ahead of projections. The company plans to shift the Guyana contract to a 50/50 profit-oil split for cost recovery, starting in Q3 2026. As investors scrutinize the performance of other supermajor earnings, they will look beyond the strong profit jump to assess how management teams anticipate the current oil rally to continue through the second half of the year.
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