ExxonMobil (XOM +1.91%) just gave investors an initial glimpse at its upcoming third-quarter earnings report. The oil giant noted that it expects strong refining margins to add $4.5 billion to its earnings in the period. That’s more than double the earnings from its energy products segment in the second quarter.
However, there were some offsetting headwinds elsewhere across its portfolio that will mute some of that positive impact. Here’s everything ExxonMobil investors need to know about its preliminary third-quarter earnings update.
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Drilling down into ExxonMobil’s preliminary report
ExxonMobil typically provides investors with an initial glimpse of its upcoming earnings report a couple of weeks before its scheduled release (Oct. 30 for the third quarter of 2026). That gives analysts and investors a heads-up on any potential meaningful impacts during the quarter.
The biggest thing that jumps out in its preliminary third-quarter numbers is the impact that changes in refining margins had on earnings from its energy products segment. Exxon reported a $4.5 billion positive effect in the third quarter. While the company noted that external impacts on its operations will shave $400 million from that total, changes in scheduled maintenance and the benefit of having more days in the third quarter will offset most of that headwind ($300 million positive impact). As a result, Exxon expects its energy products segment’s earnings to more than double compared to the second quarter ($4.1 billion).
However, the positive impact of strong refining margins was one of the many moving parts for Exxon in the second quarter. The company battled additional headwinds (lower liquids prices, external impacts, and timing issues) while benefiting from tailwinds (higher natural gas prices and the positive impact of some divestments). The net effect is that Exxon expects to report about $15.1 billion of adjusted earnings in the third quarter, up from $14.7 billion in the second quarter.
The benefits of integration
ExxonMobil is one of several large integrated energy companies, which means it has upstream oil and gas exploration and production operations, midstream logistics assets, and a downstream business (refining and chemicals). The company’s integration benefited it in the third quarter as robust refining margins offset the impact of lower oil prices.
The strong refining market is currently benefiting energy companies that operate refining assets, including those focused on refining, such as Phillips 66 (PSX +1.07%). Phillips 66 recently increased its dividend for the second time this year (10.8% overall), “reflecting the continued strength and resilience of the business,” stated CEO Mark Lashier in a press release announcing the latest increase. If ExxonMobil’s second-quarter results are any indication, Phillips 66 and its refining-focused peers will likely post robust third-quarter earnings. Its stock price has already more than doubled this year due to strong refining margins. It’s times like these that oil giant ConocoPhillips likely regrets spinning off Phillips 66 more than a decade ago to become a pure-play E&P company.
Exxon’s continued integrated approach has paid off for shareholders over the years by enabling it to deliver more resilient earnings compared to pure-play E&P companies. Exxon’s dividend reflects its resiliency, as the company has raised it for an industry-leading 43 straight years. Contrast that with ConocoPhillips, which cut its dividend a decade ago amid lower oil prices. Meanwhile, Phillips 66 has increased its dividend every year since the 2012 spinoff, growing it at a 14% compound annual rate.
Exxon’s strategy continues to pay dividends
ExxonMobil’s integrated business model continues to deliver more resilient results for shareholders. The company got a big boost from its refining operations in the third quarter, more than offsetting headwinds from lower oil prices and other factors. It’s one of the features that make ExxonMobil among the top oil stocks to buy.