Exxon Stock Slips After Earnings. The CEO Might Have Spooked Investors.

Exxon Mobil stock has been in a holding pattern. (Michael M. Santiago/Getty Images)

Exxon Mobil stock slipped on Friday, despite the company’s better-than-expected second-quarter earnings and production numbers.

It might have been something that CEO Darren Woods said. In response to an analyst question on the earnings call, Woods said Exxon is looking at buying other companies.

“We think there are opportunities out there across all of our sectors,” Woods said. The CEO added that Exxon wouldn’t simply make acquisitions to beef up production growth. It would be looking for situations where buying a company could boost Exxon’s trajectory in new ways. “One plus one has to equal three,” he said.

Woods said the oil giant is looking for deals “not just in the upstream, but across all areas that we do business.”

Historically, mergers and acquisitions have been a mixed bag for Exxon. Its purchase of Mobil in 1999 turned it into a mega-major oil company. But its acquisition of natural gas giant XTO in 2010 didn’t pan out nearly as well. More recently, Exxon’s purchase of Permian Basin producer Pioneer Natural Resources has been largely considered a success. Pioneer has helped Exxon boost its oil production from 4.3 million barrels a day in 2024 to about 4.6 million so far this year.

Exxon’s debt load is relatively low, making an acquisition more palatable. But M&A makes investors nervous, particularly at a time when oil prices are expected to fall. The stock fell 1.9% Friday morning to $109.58.

Woods’ comments could be overshadowing what was an otherwise strong earnings report.

Exxon’s second-quarter earnings of $1.64 a share topped the $1.57 analysts had anticipated, according to FactSet. Revenue of $81.5 billion also beat the $80.7 billion consensus estimate.

The company’s oil-equivalent production of 4.63 million barrels a day also outpaced expectations for 4.5 million in the second quarter.

“We achieved our highest second-quarter upstream production since the merger of Exxon and Mobil more than 25 years ago,” Woods said in a statement.

Exxon also noted that since May 2024 it had repurchased roughly 40% of the shares issued to acquire Pioneer. The company is on track to buy back a total $20 billion worth of its stock in 2025.

Write to Avi Salzman at avi.salzman@barrons.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com