S&P 500 Energy and Utilities Sectors Earnings Previews: Q2 2025

The Energy sector will be a focus for the market this week, as Exxon Mobil and Chevron are scheduled to report earnings on August 1. The Energy sector is reporting the largest (year-over-year) earnings decline of all eleven sectors in the S&P 500 for Q2 2025 at -24.0%. Lower year-over-year oil prices are contributing to the year-over-year decrease in earnings for this sector, as the average price of oil in Q2 2025 ($63.68) was 21% below the average price for oil in Q2 2024 ($80.66).

At the sub-industry level, 4 of the 5 sub-industries in the sector are reporting (or are predicted to report) a year-over-year decline in earnings. All 4 are reporting (or are projected to report) a double-digit decline: Integrated Oil & Gas (-34%), Oil & Gas Exploration & Production (-20%), Oil & Gas Refining & Marketing (-19%), and Oil & Gas Equipment & Services (-11%). On the other hand, the Oil & Gas Storage & Transportation (14%) sub-industry is the only sub-industry reporting year-over-year growth in earnings.

Looking ahead, analysts are predicting earnings growth for the sector starting in Q4 2025. For Q3 2025, analysts are calling for an earnings decline of -3.0%. For Q4 2025 through Q2 2026, analysts are expecting earnings growth rates of 1.9%, 10.2% and 29.8%, respectively.

FactSet Senior Energy Analyst Connor McLean provided commentary on key trends to watch for the Energy sector during this earnings season. (Read more commentary from Connor.)

For U.S. producers, a combination of softer pricing and ongoing uncertainty around global trade has kept market sentiment cautious through the first half of the year. While operators have reduced activity, particularly in oil-directed basins, production levels have remained strong. However, with OPEC continuing to bring barrels back to the market, growing fears of oversupply could lead to deeper pullbacks in 2026. In natural gas, elevated storage inventories are weighing on near-term Henry Hub pricing, even as LNG demand continues to climb year-over-year. Questions remain around how quickly volumes will respond to price signals, as natural gas demand looks poised to expand in 2026 driven by LNG exports and power burn from data center expansion. Midstream operators are likely to accelerate investment in infrastructure to support the expansion in demand growth, although mismatches in timing between production, pipelines, and downstream demand could lead to price volatility.

FactSet Energy Analyst Katrina Abuls provided commentary on key trends to watch for LNG projects during this earnings season. (Read more commentary from Katrina.)

With a supportive federal regulatory environment, attention remains on the growing list of U.S. LNG projects targeting FID in 2025. Venture Global's CP2, NextDecade's Rio Grande Train 4, Sempra's Port Arthur Phase 2, and Energy Transfer's Lake Charles LNG have each made progress securing offtake agreements and EPC agreements, and are aiming to reach FID by year-end. These projects follow recent positive FIDs at Cheniere's Corpus Christi Trains 8/9 and Woodside's Louisiana LNG earlier this year. Any additional facilities could introduce further upside risk for Henry Hub pricing later this decade, particularly in the absence of new pipeline infrastructure to the Gulf Coast. In the near term, market focus remains on the timeline for first LNG out of ExxonMobil's Golden Pass LNG facility, which could add incremental demand and support Henry Hub pricing this winter.

Utilities Sector: 4 of 5 Industries Reporting Year-Over-Year Earnings Growth

The Utilities sector will also be a focus for the market over the next two weeks, as 90% of the companies in this sector are scheduled to report earnings over this period. The Utilities sector is reporting a decline in earnings of -1.9% for the second quarter.

At the industry level, 4 of 5 industries in the sector are reporting (or are projected to report) year-over-year earnings growth: Independent Power and Renewable Energy Producers (22%), Gas Utilities (11%), Water Utilities (7%), and Multi-Utilities (3%). On the other hand, the Electric Utilities (-5%) industry is the only industry reporting a year-over-year decline in earnings in the sector. The Electric Utilities industry is also the largest detractor to earnings growth for the sector. If this industry were excluded, the Utilities sector would be reporting earnings growth of 6.2%.

Looking ahead, analysts believe earnings growth will return for the sector over the next four quarters. For Q3 2025 through Q2 2026, analysts are calling for earnings growth rates of 15.7%, 13.8%, 6.8%, and 12.4%, respectively.

FactSet Senior Energy Analyst Trevor Fujita discussed key trends to watch related to the Utilities sector during this earnings season. (Read more commentary from Trevor.)

The recently passed One Big Beautiful Bill Act significantly shortens the eligibility window for Inflation Reduction Act clean energy tax credits. Now, new solar and wind projects must now come online by the end of 2027 or start construction by July 4, 2026—considerably earlier than the original 2032 deadline. In the US, FactSet is currently tracking 65.5 GW of solar and 22.8 GW of wind in advanced development stages aiming to be in operation by the end of 2027, but supply chain issues and possible tariffs may prevent many projects from qualifying for the tax credits. These obstacles, combined with rising demand from AI data centers, strengthen the outlook for natural gas in power generation. However, ongoing coal dependence could dampen future gas demand. For example, Georgia Power now plans to keep their Scherer and Bowen coal plants running until 2038 instead of retiring them in 2028 and 2035, respectively. Currently, 60.5 GW of coal plants are scheduled to retire by 2030, and any retirement delays would limit growth potential for natural gas consumption in the power sector.

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