So, ExxonMobil (XOM) is out here doing its thing again, and by “its thing,” I mean dominating the oil sector like it’s running a monopoly or something. The company just dropped its second-quarter financial results, and—shocker—it’s leading the pack in pretty much every category. It’s like they’re the kid in class who not only aces the test but also helps everyone else cheat. Except, you know, legally.
And get this: Exxon’s not just resting on its laurels. No, no. They’re positioning themselves to keep delivering these leading results, which makes them a pretty compelling oil stock to buy and hold for the long term. But let’s be honest, are we really surprised? This is Exxon we’re talking about. They’re like the guy who always wins at poker, even when you’re convinced you’ve got the better hand.
Let’s Talk About Exxon’s Second Quarter
Alright, so ExxonMobil raked in $7.1 billion in earnings and generated $11.5 billion in cash flow from operations in the second quarter. That’s not just good—it’s like, “What planet are you from?” good. They’re leading all international oil companies (IOCs) by a wide margin. Chevron? They made $3.1 billion. Shell? $4.3 billion. Exxon’s out here doubling Chevron and leaving Shell in the dust. It’s almost embarrassing. For them, not Exxon.
Here’s what CEO Darren Woods had to say in the earnings release: “The second quarter, once again, proved the value of our strategy and competitive advantages, which continue to deliver for our shareholders no matter the market conditions or geopolitical developments.” Translation: “We’re killing it, and we know it.”
Exxon’s production hit 4.6 million barrels of oil equivalent (BOE) per day—their highest second-quarter production total since the Exxon-Mobil merger over 25 years ago. That’s a 13% increase, mainly thanks to their acquisition of Pioneer Natural Resources. Oh, and they’re selling more high-value products than ever before. Because, of course they are.
And let’s not forget their structural cost savings program. They’ve saved $1.4 billion this year alone, bringing their total savings since 2019 to $13.5 billion. That’s more than all other IOCs combined. It’s like they’re Scrooge McDuck, but instead of swimming in gold coins, they’re swimming in savings.
Exxon’s cash flow is so strong that they returned $9.2 billion to shareholders in the second quarter through dividends and share repurchases. That’s an industry-leading number. They’re on track to buy back $20 billion of their stock this year. And they’ve already repurchased about 40% of the shares they issued to buy Pioneer Natural Resources. Even with all that, they’ve still got the best balance sheet in the sector. It’s almost unfair.
The Future’s Looking Bright…Too Bright?
Exxon’s got six key projects up and running this year, with four more expected to start by year-end. CEO Darren Woods says these projects will improve their earnings power by more than $3 billion in 2026. And that’s just the beginning. Their plan up to 2030 includes $140 billion in major capital projects and investments in the Permian Basin. Plus, they’re aiming for $18 billion in structural cost savings by the end of 2030.
They estimate this plan will give them incremental growth potential of $20 billion in earnings and $30 billion in cash flow by 2030. That’s compound annual growth rates of 10% for earnings and 8% for cash flow. And get this: they’re expecting $165 billion in cumulative surplus cash over the next five years. That’s a lot of cash. Like, “What do we even do with all this cash?” levels of cash.
So, What’s the Takeaway?
ExxonMobil is the undisputed leader in the oil sector. Their second-quarter results are proof of that. They’re returning more cash to investors than anyone else while maintaining the best balance sheet in the industry. And their plan up to 2030? It’s going to deliver meaningful earnings and cash flow growth for years to come.
In short, Exxon’s not going anywhere. They’re going to keep returning lots of money to investors and delivering peer-leading total returns. They’ve already done it over the past five years with a 25% compound annual total return. So, if you’re looking for an oil stock to buy and hold, ExxonMobil is pretty much as good as it gets. And if you don’t buy it, well, don’t say I didn’t warn you. 🤷♂️
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2025-08-04 04:39