---
title: "Exxon (XOM) posts a strong quarter as oil eases and an EU carbon capture fight begins"
canonical_url: https://www.stockexpertai.com/journal/2026-11-11/exxon-xom-posts-a-strong-quarter-as-oil-eases-and-an-eu-carbon-capture-fight-7dd572f1cd64
last_updated: 2026-11-12T04:09:26.971Z
section: "Sector Spotlight"
author: "Stock Expert AI Research"
publisher: Stock Expert AI
tickers: XOM
content_type: journal-article
---

# Exxon (XOM) posts a strong quarter as oil eases and an EU carbon capture fight begins

_Exxon's third-quarter profit rose from a year earlier, but oil fell to its lowest since August, according to a report this week, and the company challenged an EU carbon capture law, per FT._

![Data cover: Exxon (XOM) posts a strong quarter as oil eases and an EU carbon capture fight begins](/public-objects/streetnews/2026-11-11/SECTOR_SPOTLIGHT-cover-58514204.jpg)
Stock Expert AI data cover: figures from Financial Modeling Prep; background is an illustrative public-domain photo, credited on the image.

A strong quarter at Exxon Mobil (XOM) is meeting a softer oil backdrop. For the third quarter ended Sept. 30, 2026, net income was $15.41B, higher than a year earlier, and free cash flow was $18.47B. This week, according to a report, oil prices fell to their lowest since August, and the FT reported that Exxon filed a legal challenge to an EU carbon capture law. The theme: oil majors earn a lot when prices are high, but their results depend on prices and policy that they do not control.

## Key facts

- **Earnings reported Oct. 30, 2026:** FMP's earnings data lists EPS of 4.23 against an analyst estimate of 4.12, a difference of +$0.11, or 2.7%. It lists revenue of $113.16B against an estimate of $104.89B, a difference of +$8.27B, or 7.9%.
- **Filed results, quarter ended Sept. 30, 2026 (filed Nov. 2, 2026):** revenue of $110.50B, operating income of $18.76B, net income of $15.41B and diluted EPS of 3.72. The filed figures differ from the earnings-surprise figures above, so treat them as two data sets for the same quarter.
- **Versus the year-ago quarter:** revenue rose 32.6% and net income rose 104.2% from the third quarter ended Sept. 30, 2025.
- **Share price:** 166.71 USD on the latest quote (Nov. 11, 2026), up 1.36% on the day. The 52-week range is 114.19-188.5 USD.
- **Next earnings date:** Jan. 29, 2027, with an EPS estimate of 4.09 and a revenue estimate of $117.83B.

| Metric | Q3 FY2026 (ended Sept. 30, 2026) | Q3 FY2025 (ended Sept. 30, 2025) |
|---|---|---|
| Revenue | $110.50B | $83.33B |
| Operating income | $18.76B | $9.18B |
| Net income | $15.41B | $7.55B |
| Diluted EPS | 3.72 | 1.76 |
| Operating margin | 17.0% | 11.0% |
| Free cash flow | $18.47B | $6.06B |

## What happened

**The theme.** Large integrated oil companies, which pump crude, refine it and sell fuel and chemicals, make most of their profit from the price of oil and the spread between crude and the products made from it. They also face rules about emissions and carbon. A good quarter shows what the business can earn in a favorable price environment. It does not show what it will earn in the next one.

**The result.** Exxon's third quarter was strong by the filed numbers. Revenue of $110.50B was well above the $83.33B of a year earlier. Operating income and net income both roughly doubled in the filed data, and operating margin, the share of each revenue dollar left after operating costs, was 17.0% against 11.0% a year before.

**Where the revenue came from.** Segment data shows Energy Products revenue of $87.16B in the quarter, against $44.34B a year earlier. That segment is the largest by far and is the one that moved most. Upstream revenue, which covers oil and gas production, was $11.19B against $14.02B a year earlier, so it fell. Chemical Products revenue was $6.45B against $4.91B, and Specialty Products revenue was $5.70B against $3.21B. By geography, Non-US revenue was $61.76B and Canada revenue was $10.99B.

**The trend over the past several quarters.** The path was uneven:

| Quarter | Revenue | Operating margin | Net income | Free cash flow |
|---|---|---|---|---|
| Q3 FY2025 | $83.33B | 11.0% | $7.55B | $6.06B |
| Q4 FY2025 | $80.04B | 7.5% | $6.50B | $5.23B |
| Q1 FY2026 | $83.16B | 6.4% | $4.18B | $2.23B |
| Q2 FY2026 | $114.53B | 15.9% | $14.53B | $17.03B |
| Q3 FY2026 | $110.50B | 17.0% | $15.41B | $18.47B |

Profit and cash flow were low in the first quarter of 2026 and jumped in the second. In the third quarter, net income, operating margin and free cash flow held at that higher level and edged up, while revenue slipped from the second quarter's $114.53B. Operating cash flow was $25.65B in the third quarter, against $23.55B in the second. In the third quarter, buybacks were -$5.10B and dividends -$4.26B, and free cash flow covered both. FMP lists net debt of $22.10B as of Sept. 30, 2026, with shareholders' equity of $265.79B and a debt/equity ratio of 0.13.

**Management's explanation.** The company release was not supplied for this piece, and no call commentary was available, so we cannot say in management's words what drove the change. We are not offering our own explanation for the move in profit.

**The latest development.** According to the FT, as reported by Reuters on Nov. 11, 2026, Exxon filed a legal challenge to an EU carbon capture law. The material we have does not give the details of the claim, so we will not describe its terms. The same day, a Motley Fool piece reviewed what Exxon, Chevron and Shell said about where oil goes next. A separate report on Nov. 10, 2026 said oil prices fell to their lowest since August after President Trump said the Iran war is "effectively over."

## Why it matters for investors

**Valuation.** On a trailing 12-month basis, FMP shows a P/E of 17.13, price/sales of 1.75, EV/EBITDA of 8.52, price/free cash flow of 15.83, a dividend yield of 2.5% and a net margin of 10.5%. P/E is the share price divided by a year of earnings per share.

Peers, per FMP:

| Company | Market cap | P/E | Net margin |
|---|---|---|---|
| Chevron (CVX) | $416.16B | 15.56 | 11.9% |
| BP (BP) | $118.69B | 13.19 | 3.8% |
| Imperial Oil (IMO) | $59.80B | 14.31 | 10.9% |
| Cenovus Energy (CVE) | $51.61B | 8.56 | 15.4% |
| Exxon (XOM) | $680.05B | 17.13 | 10.5% |

Exxon carries a higher P/E than each peer listed, and its net margin is below Cenovus, Chevron and Imperial Oil and above only BP.

**Analysts.** Of 55 ratings, 1 is strong buy, 20 are buy, 30 are hold and 4 are sell, for a consensus of Hold. Analysts' average price target is 169.75 USD, the median is 177.50 USD, the high is 199.00 USD and the low is 90.00 USD. The latest quote of 166.71 USD sits just below the average target. Recent rating actions from Citigroup, TD Cowen, Wells Fargo, UBS and Morgan Stanley were all maintained ratings. FMP's discounted cash flow model, which estimates what future cash flows are worth today, gives a model value of 116.05 USD per share, below the latest quote. Models like this depend heavily on their inputs.

**Our MoonshotScore.** Stock Expert AI's MoonshotScore V2 for Exxon is 75.3, rated Strong. The sector-relative pillars are safety 91, momentum 86, quality 61, valuation 57 and growth 49. Safety and momentum are the strong areas. Growth is the lowest of the five pillars, and quarterly results have been uneven. FMP's financial strength scores support the safety reading: a Piotroski score of 9 out of 9 and an Altman Z of 4.00.

**What could go wrong.** Analyst estimates for the period ending Sept. 30, 2029 are for revenue of $87.82B and EPS of 2.31, both lower than recent actuals, from 8 analysts. The estimate range for revenue that quarter is wide, from $62.95B to $100.68B. Quarterly results have swung sharply within the past year, and free cash flow in the first quarter of 2026 was only $2.23B. Falling oil prices and the new EU legal fight add uncertainty, though how each affects Exxon's results is not something we can quantify.

## What to watch next

- **Jan. 29, 2027 earnings:** the EPS estimate is 4.09 and the revenue estimate is $117.83B. Compare the operating margin with the 17.0% of the third quarter.
- **Oil prices:** the report of the lowest level since August is the first test of how much of the recent profit depends on price.
- **The EU carbon capture case:** watch for filings or company commentary that explain what Exxon is contesting.
- **Cash returns:** buybacks and dividends were both covered by free cash flow in the latest two quarters.
- **Energy Products and Upstream revenue:** the first drove the year-over-year gain, while the second fell.

## Frequently asked questions

## Q: How did Exxon do in the third quarter of 2026?

In the quarter ended Sept. 30, 2026, the filed results show revenue of $110.50B, net income of $15.41B and diluted EPS of 3.72. Net income was higher than a year earlier. FMP's earnings-surprise data lists EPS of 4.23 against an estimate of 4.12.

## Q: What is Exxon challenging in the EU?

The FT reported, via Reuters on Nov. 11, 2026, that Exxon filed a legal challenge to an EU carbon capture law. The material available to us does not describe the details of the challenge, so check the original reporting and the company's statements.

## Q: Is Exxon stock expensive compared with other oil companies?

On FMP's trailing figures, Exxon's P/E of 17.13 is higher than Chevron (CVX) at 15.56, Imperial Oil (IMO) at 14.31, BP (BP) at 13.19 and Cenovus Energy (CVE) at 8.56. This is a comparison, not a recommendation, and valuation is only one input.


*This is educational content, not investment advice. Past performance does not guarantee future results.*

## Related Tickers
- [XOM](https://www.stockexpertai.com/stock/xom)

## Sources
- [Stock Expert AI XOM page: quote, financials and MoonshotScore](https://www.stockexpertai.com/stock/xom)
- [fool.com: Exxon, Chevron, and Shell Just Reported. Here's What Each One Said About Where Oil Goes Next.](https://www.fool.com/investing/2026/11/11/exxon-chevron-and-shell-just-reported-heres-what-e/)
- [reuters.com: Exxon files legal challenge to EU carbon capture law, FT reports](https://www.reuters.com/business/energy/exxon-files-legal-challenge-eu-carbon-capture-law-ft-reports-2026-11-11/)
- [247wallst.com: A $1,000 Exxon Stake From Five Years Ago Is Now Worth $3,231, and Shares Are Up More Than a Third in 2026](https://247wallst.com/investing/2026/11/11/a-1000-exxon-stake-from-five-years-ago-is-now-worth-3231-and-shares-are-up-more-than-a-third-in-2026/)
- [247wallst.com: Treasuries Now Offer 2.66% Above Inflation. Are Dividend Stocks in Trouble?](https://247wallst.com/investing/2026/11/10/treasuries-now-offer-2-66-above-inflation-are-dividend-stocks-in-trouble/)

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_Written by Stock Expert AI's research desk with AI assistance. Figures come from FMP data and the official sources cited in the article. Educational research, not financial advice._