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Investing.com -- Imperial Oil Ltd (TSX:IMO) posted stronger-than-expected first quarter earnings on Friday, but shares fell 3.3% as investors focused on lower production volumes from key assets. The company reported adjusted earnings of C$2.52 per share, beating analyst estimates of C$2.11.
Net income rose to C$1.29 billion from C$1.20 billion a year earlier, while revenue edged higher to C$12.5 billion from C$12.28 billion. The share price reaction reflected concern over weaker output at Imperial’s flagship Kearl oil sands operation.
Total (EPA:TTEF) production for Q1 averaged 418,000 gross oil-equivalent barrels per day, down from 421,000 in the same quarter last year. Kearl production fell to 256,000 barrels per day from 277,000, which the company attributed to “extreme cold weather and unplanned downtime.”
“Imperial delivered strong financial results in the first quarter, highlighting the resilience of our integrated business model,” said CEO Brad Corson, who is set to retire on May 8. John Whelan, currently a senior executive with the company, will succeed Corson as CEO.
Cash flow from operations surged to C$1.53 billion, compared to C$1.08 billion a year ago. The company returned C$307 million to shareholders through dividends during the quarter.
Imperial confirmed construction remains on schedule at its Strathcona refinery, where Canada’s largest renewable diesel facility is expected to start up by mid-2025. The project reflects Imperial’s long-term strategy to balance oil production with low-carbon investments.
Shares of Imperial Oil have declined 11% year-to-date, tracking weaker oil prices and broader energy market volatility. Despite short-term price pressures, analysts have cited the company’s integrated model and ExxonMobil’s 69.6% ownership as structural advantages.
Founded in 1880, Imperial has weathered decades of commodity swings, supported by stable dividends and operational leverage. Its market capitalization stood at C$34.6 billion in May 2025, underpinned by large-scale oil sands assets and downstream infrastructure.
With production volatility raising questions about near-term output, investors will look to Q2 results for signs of operational stabilization and further progress on renewable initiatives. For now, execution at core assets remains a focal point amid solid financial performance.