Key Takeaways
- ExxonMobil reports third-quarter results before the open on Friday, Oct. 30, days after President Trump said the US is “making a freaking fortune” from the Iran war’s oil spike.
- The number to watch is free cash flow against the roughly $9.4 billion a quarter Exxon pays out in dividends and buybacks.
- Free cash flow jumped to $17 billion in the June quarter, after the March quarter’s $2.2 billion, dragged down by derivative collateral, fell short of the dividend alone.
- At 12x forward earnings, just under its five-year average, the stock is priced on war-year profits that analysts expect to shrink by 2028.
President Trump told a rally in Perry, Georgia, on Saturday that the US is “making a freaking fortune” on oil. (He said he could already see the headlines accusing him of bragging while people suffer at the pump, and that he didn’t care.)
ExxonMobil (XOM) gets to show how much of that fortune reaches its shareholders when it reports third-quarter results before the open on Friday, Oct. 30.
Not everyone wants Exxon to keep it. On Aug. 3, Trump told reporters that Exxon and Chevron (CVX) were “making too much money” and should give some of it back to the public. Democrats in Congress want a windfall profits tax on big producers, and Exxon CEO Darren Woods told investors on the July 31 earnings call that penalizing the companies that kept supplying fuel would be “very short-sighted.”
Follow Exxon’s Cash
The spike has already shown up once. Exxon’s cash from operations jumped to $23.6 billion in the quarter to June 30, from $8.7 billion in the March quarter, while capex barely moved. Part of that gap came from collateral: March’s figure was $13.8 billion before margin postings on Exxon’s derivatives.
XOM Cash From Operations vs. Capital Expenditures: 3-Year Quarterly (TIKR)
Capex has stayed between about $5 billion and $9 billion a quarter for three years, and management guides to $27 billion to $29 billion for 2026. So most of any extra operating cash goes straight to free cash flow.
That free cash flow has a clear bar to beat. In the June quarter, Exxon paid $4.3 billion in dividends and bought back $5.1 billion of stock, $9.4 billion in all, and its $20 billion buyback plan for 2026 keeps that pace in place. The chart shows free cash flow clearing the dividend easily in June after falling short of it in March:
XOM Free Cash Flow vs. Common Dividends Paid: 3-Year Quarterly (TIKR)
That’s a big change from 2025, when Exxon paid out $37.2 billion against $23.6 billion of free cash flow on the same basis as the charts, and its cash pile shrank from $23.2 billion to $10.7 billion. Management says the June quarter’s free cash flow cut net debt by more than $7 billion.
Exxon’s own early look at the quarter, filed Oct. 16, gives a few clues. Compared with the second quarter, it shows stronger refining margins adding about $4.5 billion to earnings and lower liquids prices taking away about $1.3 billion. Exxon also expects a $2.5 billion negative timing effect from derivatives in third-quarter reported earnings. The filing doesn’t put a number on cash, but in March, derivative collateral cut operating cash by about $5 billion, so it’s worth checking whether Friday’s figure carries a similar drag.
So the number to watch on Friday is free cash flow against that $9.4 billion, before and after any margin postings. Another quarter well above it, with room left over, would show the spike turning into real money for shareholders.
TIKR Tracks 25 Analysts on ExxonMobil. How Many Say “Buy”?
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Priced on War-Year Earnings
Exxon stock sits near a record high, yet trades at 12x forward earnings, just under its five-year average of 13x:
XOM Stock NTM P/E: 5-Year (TIKR)
But those forward earnings come from a war year. Analysts expect adjusted EPS of $13.29 in 2026, then $12.28 in 2027 and $10.62 in 2028 (about 20% below 2026), against $6.99 in 2025. Since June 30, they’ve cut their 2028 estimate by 5% while raising 2026 and 2027. The market has handled a peak like this before: in July 2022, near the last oil spike, the forward P/E fell as low as 6.6x. This time, investors are paying close to a normal multiple on earnings that are anything but normal.
Exxon sets its buybacks and capex well ahead of time, so its commitments matter more than any single quarter. Last year, Exxon declared its dividend raise with its third-quarter results: 4%, to $1.03 a share, its 43rd straight year of increases. A raise on Friday would lift the $9.4 billion bar slightly, and the corporate plan update, expected in December, sets the buyback pace for 2027.
Why Exxon Stock Isn’t a Bargain at 12x
Clearing $9.4 billion again would prove the spike is reaching shareholders. It wouldn’t make the stock cheap. Exxon is already priced for refining margins that stay well above normal, and at 12x earnings that analysts expect to fall about 20% by 2028, the multiple leaves little room for oil to come down. What would change my mind is the surplus: a bigger dividend raise on Friday, or a buyback pace above $20 billion in December’s plan, would turn war-year cash into returns that outlast the war.
Brent fell to about $115 a barrel on Monday on hopes of easing US-Iran tensions, though the IEA’s Fatih Birol said the same day he doesn’t expect energy markets to return to pre-war conditions in 2027. Exxon estimates that each $1 change in Brent moves its annual Upstream earnings by about $700 million after tax, excluding derivatives, so a year of $100 oil instead of $115 would mean roughly $10.5 billion less.
So what is ExxonMobil stock actually worth?
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