Imperial Oil Limited
IMO · NYSE
Next quarter
Expected to report Jan 29, 2027 — estimated from last year’s reporting date.
Consensus is $3.92 EPS for Dec 2026 across 2 estimates, ranging $3.79 to $4.05.
IMO Sep 2026
- 6.41%
- $3.43
- $3.65
- —
- $14.16B
Reported results
- $14.16B
- $2.45B
- $5.11
Highlights
- Record earnings Imperial earned C$2.454 billion, or C$5.11 per diluted share, versus C$539 million and C$1.07 a year earlier and C$2.190 billion and C$4.52 in Q2. The supplied consensus comparison showed EPS of $3.65 versus $3.43 expected, a 6.41% beat.
- Downstream led the quarter Segment earnings reached a record C$1.555 billion, up C$1.111 billion year over year and C$768 million sequentially, on stronger margins and volumes; renewable diesel added about C$170 million through product mix.
- Cash generation strengthened Operating cash flow was C$3.228 billion, including C$2.957 billion excluding working capital, versus C$1.798 billion and C$1.600 billion, respectively, a year ago. Free cash flow was C$2.566 billion.
- Shareholder returns remained substantial Imperial returned C$2.506 billion, comprising C$420 million in dividends and C$2.086 billion in repurchases; it ended the quarter with C$2.893 billion of cash.
- Upstream output remained below year ago Gross production was 418,000 oil-equivalent barrels per day, down from 462,000, though 4,000 above Q2. Kearl’s third-party pipeline outage contributed to the shortfall, and its 2026 production target was reduced to 280,000 gross barrels per day.
- Refinery utilization was lower Throughput averaged 381,000 barrels per day at 88% utilization, versus 425,000 and 98% a year ago, reflecting planned turnarounds, unplanned downtime and a pipeline outage. Product sales nevertheless rose to 474,000 barrels per day from 464,000.
- Capital spending increased Capital and exploration expenditures were C$668 million, up C$163 million year over year, with upstream spending focused on sustaining work and asset projects.
Analysis
Imperial’s Q3 2026 was a record earnings and cash-generation quarter, with a clear split between a standout downstream result and softer upstream volumes. Net income was C$2.454 billion, up from C$539 million a year ago and C$2.190 billion in Q2; diluted EPS was C$5.11 versus C$1.07 and C$4.52. The prior-year quarter included C$555 million of after-tax impairment and restructuring charges; against adjusted year-ago net income of C$1.094 billion, earnings still rose C$1.360 billion. Separately, the supplied consensus comparison put EPS at $3.65 against $3.43 expected, a 6.41% beat; the company’s reported diluted EPS was C$5.11.
The main driver was downstream, where earnings hit a record C$1.555 billion as refining margins and volumes improved sequentially. Renewable diesel at Strathcona reached its highest production to date and contributed about C$170 million in favourable product mix. Upstream earnings were C$941 million, down C$358 million from Q2 as crude realizations weakened, while gross production remained below year-ago levels amid turnarounds and third-party disruptions. Operating cash flow rose to C$3.228 billion, or C$2.957 billion excluding working capital, and Imperial returned C$2.506 billion to shareholders. Management expects to finish accelerated buybacks by year end and said it is positioned to return additional surplus cash in the new year.
Downstream earnings
Downstream was the defining strength of the quarter. Earnings of C$1.555 billion were a record, up from C$444 million a year earlier and C$787 million in Q2. Higher market margins drove the year-over-year improvement, while stronger margins and volumes supported the sequential increase. Renewable diesel was an important differentiator: favourable product mix contributed about C$170 million in the quarter, and the Strathcona facility achieved its highest canola throughput and renewable diesel production to date.
- Refinery operations Throughput was 381,000 barrels per day and utilization 88%, down from 425,000 barrels per day and 98% a year ago. Planned Sarnia turnaround work, unplanned downtime and an 18-day third-party pipeline outage constrained runs.
- Sales and optimization Petroleum product sales increased to 474,000 barrels per day from 464,000 a year earlier, primarily on higher exports. Imperial said it optimized feedstocks and product mix toward higher-value distillates, while Strathcona rail-logistics work is intended to support higher crude runs and canola throughput.
Upstream production
Upstream earnings increased year over year to C$941 million from C$728 million, as higher crude realizations outweighed lower volumes and higher costs. Bitumen realizations rose C$23.94 per barrel and synthetic crude realizations rose C$33.71, primarily reflecting stronger marker prices. Sequentially, however, upstream earnings fell C$358 million, mainly because of lower realizations. Production remained the operating concern: management described the quarter as below expectations and lowered Kearl’s full-year production target after third-party disruptions.
- Volumes Gross oil-equivalent production was 418,000 barrels per day, 44,000 below Q3 2025 and 4,000 above Q2 2026. Kearl produced 282,000 gross barrels per day, including several days of shutdown after a transformer failure affected the Woodland pipeline; Cold Lake averaged 139,000 barrels per day during its planned turnaround and Syncrude 70,000 during its coker turnaround.
- Outlook and costs Kearl’s 2026 target is now 280,000 gross barrels per day, or 199,000 Imperial-share barrels per day. Management remains confident in its longer-term targets of 300,000 barrels per day at Kearl in 2028 and 165,000 at Cold Lake, while acknowledging that lower volumes and higher energy and turnaround costs lifted upstream unit cash costs.
Cash and distributions
Strong earnings translated into substantial operating cash flow, though the reported figure included a working-capital benefit. Cash and cash equivalents rose to C$2.893 billion from C$2.839 billion at the end of Q2, even after capital spending and large shareholder distributions. Imperial expects to complete the accelerated normal course issuer bid before year end; management said a substantial issuer bid is another possible tool for returning surplus cash before the current bid can be renewed in late June 2027.
- Cash generation Operating cash flow was C$3.228 billion, up from C$2.704 billion in Q2 and C$1.798 billion in Q3 2025. Excluding working capital, it was C$2.957 billion, versus C$2.522 billion and C$1.600 billion, respectively. Free cash flow was C$2.566 billion.
- Capital allocation Imperial paid C$420 million in dividends and repurchased C$2.086 billion of shares, for total returns of C$2.506 billion. It declared a fourth-quarter dividend of C$0.87 per share, unchanged sequentially. Capital and exploration spending was C$668 million, up C$137 million from Q2.
Chemicals and costs
Chemical earnings improved to C$52 million from C$21 million in Q3 2025, primarily as polyethylene margins improved, but fell from C$65 million in Q2. Across the business, cash operating costs were C$2.345 billion, versus C$2.248 billion a year earlier. Upstream costs reflected higher energy and planned turnaround activity; downstream faced higher operating expenses, partly offset by the renewable-diesel mix benefit. Corporate and other reported a C$94 million loss, compared with a C$654 million loss a year earlier, when impairment and restructuring charges weighed on results.
Growth and execution
With planned turnarounds complete, management expects a stronger Q4 operating finish, while noting that commodity prices and market conditions remain volatile. At Kearl, a flotation-column secondary-recovery project has started up; the company also cited mine sequencing and a new east pit planned for 2027 as supports for future production. Management said it sees no systemic operating issues behind this year’s shortfalls and remains confident in its asset targets. Longer-term growth beyond existing assets remains conditional on technology readiness, project economics and a more supportive fiscal and regulatory framework.
