Exxon and Chevron Beat Profit Forecasts as Refining Earnings Surge

ExxonMobil and Chevron both beat analyst expectations for third quarter profit on Friday, October 30, as soaring refining margins increased earnings from their fuel making businesses to rival the upstream segments, Reuters reported.

ExxonMobil reported third quarter adjusted earnings of $4.23 per share, ahead of the average analyst expectation of $4.08 compiled by LSEG. Its adjusted total earnings were $17.5 billion, beating the average analyst estimate of $16.6 billion compiled by LSEG. Chevron reported third quarter adjusted earnings of $5.28 per share.

Refining moves in front

Exxon is now earning more money from refining than from upstream for the first time in at least the past six years, Reuters reported. Chevron's third quarter downstream earnings also reached their highest point over the same time frame.

Exxon's adjusted downstream earnings totaled $9 billion, a 120 percent surge from the previous quarter, due to higher refining margins. Its adjusted upstream earnings were $7.3 billion, a 20 percent decline from the second quarter, as benchmark Brent crude prices were lower.

Exxon produced 4.5 million barrels of oil equivalent per day, roughly flat from the second quarter. It earned $1.3 billion in adjusted earnings from specialty products, up 32 percent from the previous quarter.

Why margins jumped

Reuters reported that the US-Israeli war on Iran and the conflict between Russia and Ukraine have disrupted global energy markets and sent gasoline and diesel prices higher. The effective closure of the Strait of Hormuz and attacks on refineries in Saudi Arabia and Russia have knocked out fuel making capacity. That lifted margins for Exxon and Chevron as they ran their US refineries near full rates.

Exxon said its US Gulf Coast refineries reached the second highest diesel production level on record and operated at 100 percent crude unit utilization. Chevron Chief Financial Officer Eimear Bonner told Reuters that the spot price of benchmark Brent crude swung from as low as $68 per barrel to a high of $132 during the third quarter.

Debt, buybacks and refinery investment

Exxon reduced debt by $8 billion during the third quarter. Chevron has cut net debt by nearly $14 billion compared with the end of 2025.

Exxon announced a 2027 share repurchase program of $20 billion, the same amount as in 2026 and the same level as the previous two years. The company is continuing to invest more in its refineries, including at its Baytown complex in Texas, to increase fuel production. It said US distillate production will grow by another 100,000 barrels per day through the refinery investments, in prepared remarks ahead of the earnings call, without giving a timeline.

Chevron has opportunities to increase efficiency at its US Gulf refineries and could grow capacity by 7 percent at its Pascagoula refinery in Mississippi by the end of the decade, Bonner told Reuters in an interview.

Shares of Exxon rose 2 percent in premarket trading, while Chevron was up 1 percent.