We are still in the early innings of the earnings season, with roughly a third of S&P 500 companies having returned their second quarter scorecards. And, it’s shaping up to be yet another bumper earnings season: according to FactSet data, 86% of those companies have exceeded Wall Street’s earnings projections while 80% have beaten revenue expectations.The Energy sector is reporting the highest earnings growth clip of all 11 market sectors at 128.2% Y/Y, well above the S&P 500 average at 37.9%, thanks in large part to higher oil prices amid the Middle East conflict. Brent crude averaged $92.55 per barrel in the second quarter, 45% above Q1 2026 average at $63.68/bbl. At the sub-industry level, 4 of the 5 sub-industries in the energy sector are reporting double-digit earnings growth: Oil & Gas Refining & Marketing (249%), Integrated Oil & Gas (166%), Oil & Gas Exploration & Production (104%), and Oil & Gas Storage & Transportation (11%). Only the Oil & Gas Equipment & Services sub-industry is reporting an earnings decline at -16% Y/Y. Two of the world’s largest oil and gas companies reported second quarter earnings on Friday.Chevron Corp. (NYSE:CVX) reported the highest quarterly profits in six years, easily beating Wall Street’s expectations. Chevron reported Q2 2026 earnings of $6.06 per share, comfortably beating the FactSet consensus estimate of $5.55 while revenue jumped to $70.06 billion (+56.2% Y/Y), beating Wall Street's $62.72 billion projection. Upstream earnings came in at $8.2 billion, good for a tripling year-over-year, while downstream earnings surged to $4.9 billion, up from $737 million the previous year. Total production reached 4.07 million barrels of oil equivalent (boe) per day, with U.S. output hitting an all-time high of 2.08 boe. Production rose 20% Y/Y, driven by legacy Hess assets, the Permian Basin, and the Gulf of America. The company also achieved $1.5 billion in deal synergies from its Hess acquisition, six months ahead of schedule. Chevron maintained its steady capital return plan during the quarter. The company repurchased $3 billion in shares, paid out $3.5 billion in dividends, and paid down debt by a record $.4 billion during the quarter. Chief Financial Officer Eimear Bonner confirmed that full-year share repurchase targets will remain locked between $10 billion and $20 billion.Exxon Mobil (NYSE:XOM) reported mixed results with Q2 Non-GAAP EPS of $3.52 missing by $0.11 mainly due to heavy refinery maintenance limiting fuel margin capture and price volatility, while revenue came in at $116.02 billion, up from $81.51 billion for last year’s corresponding quarter. Second quarter net profit was $14.5 billion, climbing to a four-year high driven by high oil prices and tight global supply, while free cash flow came in at $17.2 billion, exceeding expectations. ExxonMobil reported its highest upstream production in over 20 years (excluding Middle East's disruptions), powered by record output in the Permian Basin where output surpassed 1.8 million boepd, matching a planned 9% compound annual growth rate through 2030. ExxonMobil returned $9.4 billion to shareholders in the second quarter, consisting of $4.3 billion in dividends and $5.1 billion in share repurchases. The company announced it has realized $16.3 billion in cumulative structural cost savings relative to 2019 levels, driven by workforce reductions, digital tools and facility upgrades.The supermajor also highlighted several major milestones for its Guyana operations. The company’s 5th Floating Production, Storage, and Offloading (FPSO) vessel (Uaru project) has officially set sail, with production startup firmly on track for fourth-quarter 2026, which will add 250,000 barrels per day (Kbd) of production capacity.ExxonMobil noted that current operations across the first four FPSOs are consistently producing approximately 100,000 barrels per day above their investment basis, achieving a 98% year-to-date reliability performance. According to ExxonMobil's chief financial officer, the company has fully recovered its initial $55 billion investment in Guyana since 2014, two years ahead of projections. Exxon will now book ~100,000 fewer barrels per day for cost recovery starting in Q3 2026, pivoting the contract into a 50/50 profit-oil split that will increase direct revenue for both the consortium and Guyana.Meanwhile, progress for the Longtail project in Guyana remains on schedule, which will mark Guyana’s first offshore development specifically targeting non-associated natural gas rather than oil. The layout targets up to 1.2 billion cubic feet of gas per day alongside 250,000 barrels of condensate, with a 2030 first-production window.Attention will now shift to the next wave of supermajor earnings, with BP scheduled to report on August 4, followed by ConocoPhillips on August 6. Investors will be looking beyond another likely jump in profits to gauge how management teams expect the current oil rally to hold up through the second half of the year. Capital spending, shareholder returns, production guidance, trading performance and any changes to long-term investment plans will be closely scrutinized after Chevron and ExxonMobil demonstrated just how quickly higher crude prices have translated into stronger cash flow and record capital returns.By Alex Kimani for Oilprice.comMore Top Reads From Oilprice.comAustralian Regulator Wants Tougher Pollution Rules for Darwin LNG PlantsIndian Oil Subsidiary CPCL Plans 280,000 Bpd Manali RefineryDark Tanker Transits Surge at Bab el-Mandeb as Houthi Threat Persists