Exxon Mobil (NYSE: XOM) shares closed at $106.21 on May 2, gaining 0.41%

The company posted strong first-quarter 2025 results. Exxon reported earnings of $7.7 billion, up 4% sequentially, excluding identified items.

Exxon Mobil (NYSE:XOM) shares closed higher on Monday after the company posted strong first-quarter results that saw earnings and cash flow exceed expectations.

Exxon reported earnings of $7.7 billion, up 4% sequentially, excluding identified items, and in line with the average analyst estimate. Cash flow from operations came in at $13 billion, leading the industry and highlighting Exxon’s leadership among integrated oil companies (IOCs).

The company’s next earnings are expected between July 31 and August 4, 2025.

Exxon Achieves Major Operational and Financial Milestones in Q1

Since 2019, Exxon has delivered $12.7 billion in structural cost savings, at an annual average of $2.5 billion. During the quarter, the company completed $1.8 billion in asset sales, reaching a total of $5 billion in divestments, which is ahead of schedule.

Exxon also maintained a robust balance sheet, with a 7% net debt to capital ratio at the end of the quarter, the best among large-cap industrials and major IOCs. This compares favorably to an average of 28% for large-cap industrials and 18% for major oil and gas companies.

Shareholder returns remained a priority, with $9.1 billion distributed during the quarter, including $4.8 billion in share buybacks. Over the past three years, Exxon has generated free cash flow of more than $68 billion, which is greater than 25% of its current market cap. This has enabled the company to deliver a total shareholder return of 60% and a compound annual growth rate of 17%.

Exxon is investing in future growth projects, such as a world-scale chemical plant in China and advanced recycling units, which are expected to come online in 2026. These initiatives align with its low-carbon transition plans and aim to strengthen its position in the evolving energy market.

Risks From Tariffs, OPEC, and Legal Battles

Despite the solid Q1 results, Exxon faces notable challenges. The ongoing uncertainty around tariffs and a potential rise in OPEC supply are putting pressure on energy prices and margins.

The chemicals division, in particular, is exposed to slowing global growth and increasing trade barriers, which could affect earnings in future quarters. Legal risks are also emerging, such as Exxon’s lawsuit against the European Union’s windfall profits tax.

Although management views the tax as unjustified, prolonged legal battles could distract from strategic initiatives and weigh on investor sentiment. Another critical focus is the Baytown Blue Hydrogen project, which is encountering difficulties in securing offtake agreements.

This setback could hamper progress on Exxon’s broader low-carbon strategy, and resolving it quickly will be crucial for the company to maintain its momentum in the second half of 2025.