Imperial Oil (IMO 3.49%), a leading Canadian integrated energy company known for its oil sands, refining, and marketing operations, announced its Q2 2025 results on August 1, 2025. The company achieved historic upstream production but reported lower overall profits due to weaker commodity prices. Revenue (GAAP) was $11.2 billion, beating analyst estimates of $8.91 billion (GAAP) by a wide margin. Earnings per share (GAAP) reached $1.86, surpassing the $1.19 expected GAAP EPS figure, while Net income (GAAP) stood at $949 million. Although year-over-year profit and revenue (GAAP) declined, The quarter was defined by remarkable operational gains, successful project launches, and outperformance versus market estimates, with GAAP EPS of $1.86 and GAAP revenue of $11,232 million both exceeding analyst expectations.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $1.86 | $1.19 | $2.11 | (11.8%) |
| Revenue (GAAP) | $11.2 billion | $8.9 billion | N/A | - |
| Net Income | $949 million | $1,133 million | (16.2 %) | |
| Free Cash Flow (Non-GAAP) | $993 million | $1,173 million | (15.3 %) | |
| Upstream Production (gross oil-equivalent, thousands bbl/day) | 427 | 404 | 5.7 % |
Source: Analyst estimates for the quarter provided by FactSet.
Company Overview and Key Focus Areas
Imperial Oil operates as an integrated energy company in Canada. Its main business spans oil sands extraction, conventional crude and natural gas production, petroleum refining, and retail fuel marketing. Prominent assets include the Kearl and Cold Lake oil sands, as well as the Syncrude joint arrangement, which processes bitumen into synthetic crude oil.
The company's long-term success depends on five key factors: strong reserves and production capabilities, cost management, regulation and government relations, lower-emission technology projects, and its ability to compete in dynamic product markets. Recent efforts focus on squeezing costs further, boosting output from existing facilities, and executing major projects in renewable fuels and advanced recovery techniques.
Quarter Review: Record Output, Efficiency Gains, and Segment Trends
The quarter was notable for operational milestones despite a revenue and profit drop from the prior year. Gross upstream production hit 427,000 barrels per day—the best second-quarter result in over 30 years. The Kearl oil sands facility set a new second-quarter record, contributing 275,000 barrels per day (195,000 barrels Imperial's share), up from 255,000 barrels per day (181,000 barrels Imperial's share) in Q2 2024. Syncrude (synthetic crude oil) output also climbed, with Imperial's share rising 16.7% to 77,000 barrels per day from 66,000 barrels per day in Q2 2024. Cold Lake production was slightly lower, due to scheduled maintenance and steam-cycle timing.
Although production was strong, Overall revenue and profit (GAAP) saw year-over-year declines. Net income (GAAP) was $949 million versus $1,133 million in Q2 2024. Operating cash flows excluding working capital were $1.4 billion (non-GAAP). Despite these lower commodity prices—such as Canadian bitumen falling from $83.02 per barrel in Q2 2024 to $65.82 per barrel—the company’s cost control measures delivered real results. Upstream unit cash costs (non-GAAP) dropped to $29.00 per barrel, down from $32.75 in Q2 2024. At Cold Lake, cost reductions continue to move toward a targeted $13 per barrel level, as discussed by management as the unit cash cost goal.
Project execution was another highlight. The company completed planned maintenance at major sites, notably Kearl and its eastern manufacturing hub, and began steam injection at the Leming steam-assisted gravity drainage (SAGD) project, with first oil from that project expected by late 2025. Additionally, The startup of Canada’s largest renewable diesel facility at the Strathcona refinery will deliver lower-emission fuels to the Canadian transportation sector.
Sustained pressures were seen in some segments. Refinery throughput decreased to 376,000 barrels per day due to unplanned downtime, though utilization still reached 87%, including the successful execution of significant planned turnaround work at Nanticoke and Strathcona. Petroleum product sales, which include gasoline and diesel, rose 2.1% to 480,000 barrels per day from 470,000 barrels per day in Q2 2024, enabled by the Trans Mountain pipeline expansion. In contrast, the chemicals business endured a tough quarter as net income fell to $21 million from $65 million in Q2 2024, affected by continued margin weakness in polyethylene products.
The company paid $367 million in dividends and declared a $0.72 per share dividend. While no shares were repurchased in the period, management renewed authorization to buy back up to 5% of shares, with plans to accelerate purchases and complete the program prior to year end. Imperial advanced projects with the support of provincial government.
Looking Ahead: Guidance and Watchpoints
Imperial management did not provide quantitative financial guidance for the next quarter or the full year. However, it is signaling confidence in continued operational momentum as heavy maintenance completes and key projects such as the Strathcona renewable diesel facility come online. Priorities in the next period are maximizing reliability at core sites, keeping unit costs down, and taking advantage of the new product capacity coming online.
The dividend was maintained at $0.72 per share for the quarter. For investors, areas to watch include the impact of oil and chemical prices on future profits, the pace of share repurchases, and the ability of new production to support long-term growth. Ongoing environmental investments—expected to reach approximately $2.6 billion in 2025—are becoming increasingly important to both compliance and brand positioning, particularly as lower-emission fuel projects shift from construction to operation.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
