Exxon Mobil (XOM) and Chevron (CVX) both reported first-quarter 2026 results that beat analyst expectations, even as net income fell dramatically at both companies compared with the same period last year. Exxon’s net income declined 45 percent to $4.2 billion, while Chevron’s tumbled 36 percent.
The culprit in both cases was the same: the US war with Iran, which disrupted shipping routes and generated accounting charges that weighed heavily on headline profits. Both stocks experienced a decline of more than 1 percent in trading after the results, as investors processed guidance cautioning about continued disruption.
Exxon’s results were particularly complicated by a phenomenon the company described as a timing effect. The company’s trading division placed financial hedges to lock in profits on Middle Eastern oil barrels that were then rerouted following military action. When those hedges were not offset by physical product deliveries in the same quarter, the accounting result was a loss of approximately $4 billion. Exxon’s CEO stressed that the impact is temporary and that the hedges will produce net profits in subsequent quarters once product is delivered. Excluding these timing effects, Exxon earned $8.8 billion, or $2.09 per share, a figure that comfortably beat consensus estimates. Production reached 4.6 million barrels per day.
Chevron reported revenue of $48.61 billion, missing analyst estimates of $52.1 billion, though its adjusted earnings per share of $1.41 significantly beat the LSEG consensus of $0.95. The company’s CFO highlighted a strategic focus on growing free cash flow rather than production volumes, an important signal for how Chevron intends to navigate an environment where oil prices remain elevated due to geopolitical uncertainty but where operational risks have also increased. Exxon’s CFO confirmed that Permian Basin operations would remain unchanged regardless of the broader disruption.
The broader context is significant. Crude oil prices have been running above $100 per barrel partly due to the Iran conflict, a dynamic that should benefit both companies’ revenues over time even as it creates short-term accounting complexity. Exxon noted that if the Strait of Hormuz were closed for the entire second quarter, its Middle East production would fall by 750,000 barrels per day. That is a material risk that markets are clearly monitoring. The earnings results confirm that both companies are operationally resilient and capable of beating expectations even under genuinely difficult conditions, which is reassuring for long-term shareholders though the headline profit declines will remain uncomfortable in investor communications until the conflict stabilises.
