ExxonMobil earnings may miss again as Hormuz conflict hits revenue

ExxonMobil, the world's largest publicly traded energy giant, is set to release its fiscal first-quarter 2026 earnings report before the US market opens on May 1. 

These will be the company's first full quarterly results since the outbreak of the Hormuz conflict, with investors keenly watching the impact on its bottom line.

ExxonMobil's revenue is anticipated to decrease by 4% year-on-year in the reporting quarter, according to market expectations, marking a slowdown compared to the flat revenue performance observed in the corresponding quarter last year.

Earlier this month, the energy giant had indicated that its first-quarter earnings are projected to be lower than the preceding quarter's.

This anticipated decline is attributed to a multi-billion dollar impact from financial hedging, which is expected to negate the benefits of higher oil and gas prices caused by the Iran war.

Earnings expectations

The expected earnings per share (EPS) are projected to be $0.89, which is a significant year-over-year decrease of 49.52%.

This follows the previous quarter's results, where the reported EPS of $1.53 fell short of the analyst estimate of $1.66.

Analysts project the company's EPS to be $8.73 in fiscal 2026, a 24.9% increase from $6.99 in fiscal 2025.

It is then expected to rise another 5.5% YoY to $9.21 in fiscal 2027.

Over the past month, analysts tracking ExxonMobil have largely maintained their financial projections, suggesting an expectation that the company's performance will remain steady as it approaches the upcoming earnings release. 

This stability in analyst forecasts comes despite the fact that ExxonMobil has failed to meet Wall Street's revenue expectations on several occasions over the last two years.

Dividends and peers

ExxonMobil offers a compelling dividend for income investors, currently yielding 2.62% with an annual payout of $4.04 per share.

The 59.74% payout ratio is sustainable, allowing the company sufficient financial flexibility for both ongoing capital investment and continued returns to shareholders. 

This predictable and consistent performance is a key factor for investors who prioritise stable income streams and closely monitor XOM's earnings.

Examining ExxonMobil’s upstream and integrated segment peers provides early insights into expected results for the first quarter this year. 

World Kinect, for instance, reported a 2.5% year-on-year revenue increase, exceeding analyst expectations by 10.4%.

Following this positive news, the company's stock rose by 10.9%. Conversely, Noble Corporation saw a 10.2% decline in revenue; however, this still managed to beat estimates by 6.8%, resulting in an 8.2% stock increase.

Sentiment among investors in the upstream and integrated segment has been positive, reflected in an average share price increase of 3.4% over the last month. 

However, ExxonMobil has underperformed, with its share price down 9.1% during the same period. Heading into earnings, ExxonMobil's current share price of $154.23 is below the average analyst price target of $166.14.

The reaction of ExxonMobil stock to its upcoming earnings will hinge on several key factors, primarily oil price trends. 

Investors should pay close attention to management's outlook on future crude price assumptions and reported production volumes.