Chevron (CVX) and Exxon Mobil (XOM) beat earnings expectations despite lower crude prices.
Chevron and Exxon Mobil released their third-quarter earnings this week, providing an important snapshot of the global oil market and investor sentiment toward energy stocks. While both companies beat profit forecasts, weaker oil prices weighed on revenue growth.
Key Points
- Chevron’s profit declined year-over-year but beat expectations on both earnings and revenue.
- Exxon Mobil raised its dividend after posting stronger-than-expected profits despite softer revenue.
- Oil production surged, supported by acquisitions and project expansions.
Chevron’s Earnings Beat: Growth Through Acquisition
Chevron reported adjusted earnings of $1.85 per share, topping analyst forecasts of $1.71. Revenue reached $49.73 billion, beating expectations of $47.23 billion. However, profit dropped to $3.54 billion from $4.49 billion last year due to lower crude prices.
The key driver of Chevron’s performance was its 21% increase in oil and gas production, boosted by its $55 billion acquisition of Hess earlier this year. The deal gave Chevron access to the massive Stabroek Block in Guyana, estimated to hold over 11 billion barrels of oil.
CEO Mike Wirth noted that “the integration of Hess is progressing well,” as the company aims to strengthen its long-term growth strategy. Chevron returned $6 billion to shareholders this quarter through dividends and buybacks and plans to reinforce its message of resilience at its upcoming investor day.
Exxon Mobil’s Mixed Quarter: Higher Dividend, Rising Debt
Exxon Mobil posted adjusted earnings of $1.88 per share, slightly above forecasts of $1.82. Revenue came in at $85.3 billion, missing expectations by a small margin.
Despite a profit decline to $7.55 billion from $8.61 billion a year ago, Exxon continued to show operational strength, raising its daily production to 4.77 million barrels. The company also increased its quarterly dividend by 4% to $1.03 per share—marking its 43rd consecutive year of dividend growth.
However, Exxon’s growing debt and free cash flow shortfall raised some investor concerns. The company distributed $9.4 billion to shareholders during the quarter while generating $7.5 billion in free cash flow, signaling that shareholder returns are outpacing available cash.
How Are Oil Prices Impacting These Companies?
Oil prices have fallen roughly 14% over the past year, now hovering around $64 per barrel. The decline has squeezed profit margins across the sector, even as production and efficiency improvements have helped companies stay profitable.
For both Chevron and Exxon Mobil, the key challenge is balancing shareholder payouts with the need to invest in future energy projects. Their results show that scale and strategic acquisitions continue to be essential tools for managing volatility in the oil market.
What It Means for Investors
For retail investors looking to analyze stocks or understand the basics of investing in energy, Chevron and Exxon Mobil remain two of the best company investments in the sector. Chevron’s acquisition of Hess positions it for long-term production growth, while Exxon’s consistent dividend history appeals to income-focused investors.
That said, both companies are navigating a tricky environment of lower oil prices and rising capital costs. Short-term volatility may persist, but their strong balance sheets and operational efficiency make them companies that are good to invest in for long-term stability and dividends.
Investors should also keep an eye on the upcoming Chevron investor day and Exxon’s capital spending plans for 2026, which could set the tone for their next growth phase.
Conclusion
Chevron and Exxon Mobil’s latest earnings highlight the resilience of the oil sector despite falling prices. Both companies beat expectations, continued rewarding shareholders, and are positioning themselves for a future that balances traditional energy strength with strategic growth. For investors tracking investment news and looking for the best stocks to buy, these reports offer a timely reminder that steady, well-capitalized energy giants can still deliver solid returns—even in a challenging market.
FAQs
1. Why did Chevron’s profit decline even though it beat earnings expectations?
Lower crude oil prices reduced overall profit margins, even though the company’s efficiency and Hess acquisition boosted total output.
2. How is Exxon Mobil managing its shareholder payouts?
Exxon continues to raise dividends and repurchase shares, but it’s spending more on these distributions than it generates in free cash flow, increasing its debt load.
3. What role does the Hess acquisition play in Chevron’s future?
It gives Chevron access to one of the world’s largest new oil discoveries in Guyana, which could drive long-term growth and help offset oil price volatility.
4. Are Chevron and Exxon still good investments?
Both remain solid choices for investors seeking reliable dividends and exposure to the energy sector, though short-term price movements may depend on oil market trends.
5. How are falling oil prices affecting the industry overall?
Lower prices are squeezing profits but encouraging companies to focus on efficiency, production growth, and shareholder value.
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