Exxon Mobil reports $39.5B annual profit

<div class='quotetop'>QUOTE(Beryl Octet @ Feb 1 2007, 09:13 AM) [snapback]383831[/snapback]</div>

On behalf of Exxon stockholdes everywhere, I'd like to thank all the people out there in America who just have to have their big, thirsty gas guzzling pickups and SUVs. Thanks for making me rich!

 

<div class='quotetop'>QUOTE(Beryl Octet @ Feb 1 2007, 09:50 AM) [snapback]383843[/snapback]</div>

H.L. Mencken's proverb "No one ever went broke underestimating the intelligence of the American people" is a sure thing. I wish that it wasn't but it is. It's probably on a plaque in W's or Rover's office.

Mencken also said "People can easily be persuaded to accept the most inferior ideas or useless products."

 

The Federal and state govenrments made over $70 billion in profits on gasoline sales in 2002. It was probably even more than that in 2006.

 

<div class='quotetop'>QUOTE(JackDodge @ Feb 1 2007, 09:26 AM) [snapback]383835[/snapback]</div>

Yup, I've been dripping exxon monthly for over a decade. This may sound silly, but I use every shareholder vote to vote against the board and all their recommended ammendments.

 

108 million a day
4.5 million an hour

ya that is reasonable

 

<div class='quotetop'>QUOTE(DaveinOlyWA @ Feb 1 2007, 04:18 PM) [snapback]384023[/snapback]</div>

And the American public consumed (at least in 2005)

320.5 million gallons of gasoline a day
13.4 million gallons of gasoline per hour

And that's not counting disel, and heating oil, and natural gas, and everything else Exxon sells.

Exxon's profits are only 10.5% of their revenues. It's just that they sell A LOT of product and therefore get a lot of profit. If you completely eliminated Exxon's profit, you would still be unhappy about the gasoline prices. Because instead of $2.29 a gallon, the price would be around $2.11 a gallon. Back when gas was $3.45 a gallon, the profit free price would have been around $3.25 a gallon.

I don't understand why so many of you cling to the notion that gas prices are so high because of the oil company profits. Especially when at todays price, the taxes you pay on gas are about 2.5 times the profit that the oil companies earn.

 

sorry that DOES NOT WORK for me.

selling a lot of product justifies this profit level???

lets look at produce growers, orchards, cattle ranchers. ah heck, lets look at ANY commodities industry. they all sell tons of product. just as we feel we all need gasoline, we really do all need food. but no where in the food industry do we see this profit margin.

i work with a guy whose family is running a very large family farm in Eastern Washington. they would be creaming their jeans to have a 10% profit on the fruit they sell. but in actuality, they HOPE to profit 1-2%.

but percentages is crap anyway. a billion of profit is a billion of profit. because they have to sell 250 billion in profit justifies 40 billion in profits.

sorry cant buy that

 

<div class='quotetop'>QUOTE(DaveinOlyWA @ Feb 1 2007, 02:18 PM) [snapback]384023[/snapback]</div>

I take that you said the above in a cynical fashion. My question to you is what is reasonable? Should we cut that number in half? How about one quarter? How about no profit?

Publicly held companies as large as Exxon live and die by their stock price. The CEO and board members have one main goal in mind; generate enough sales to produce the highest stock price. Large profits are usually a sign a company is healthy and growing.

The only solution in a capitalist type economy would be to put the oil company in control of the government. Then we could have our elected officials decide how to run an oil company. Would you rather have GWB or Nancy running Exxon? We could pattern our new US conglomerate after, say, PEMEX, a model of efficiency and economy that has worked well for the Mexicans (right!!!!).

I say so what if Exxon makes a trillion dollars in profit. If you don't like it, don't buy their product. Apparently, though, you are in the minority.

Rick
#4 2006

 

I just looked at their financials for '05. Since 2001, their net profits have risen from 7% to over 10%. This increase of profit can be somewhat explained by the fact that while they've managed to grow their revenues signficantly, they've actually decreased their G&A percentage since that period of time.

Keep in mind, that they've yet to pay the billions of damages for their valdez mishap and they've banked the insurance settlement and have continued to collect interest on the money for the past two decades. This interest is said to be more than what they owe in damages. A lot of the people to whom damages are owed are now dead. They probably also spent more money on appeal costs than the original damages imposed. Niiiiice. Big money, small conscience.

 

<div class='quotetop'>QUOTE(SSimon @ Feb 1 2007, 04:50 PM) [snapback]384187[/snapback]</div>

There are often some savings when companies merge; the merger of Exxon and Mobil may have given them the opportunity to gain a few percentage points in gross profits.

Does anyone know if this is before taxes? The after-tax number may be significantly lower.

Meanwhile, look at your Ipod ... Apple's profit on their first quarter (their fiscal year starts in October) was 1 billion dollars on 7.1 billion in revenue, with a gross margin of 31.2 percent (see http://www.apple.com/pr/library/2007/01/17results.html for their press release). That's up significantly over last year, but Apple has yet to announce any price reductions or help for the third world. Evil corporate robber barons!

 

<div class='quotetop'>QUOTE(fshagan @ Feb 2 2007, 03:08 AM) [snapback]384300[/snapback]</div>

The net profit of around 10% is subsequent taxes. If I remember correctly, they are financing very little debt, comparatively speaking, which also helps the bottom line.

If evil corporate robber barons look like this, I'm game. Although I would like to think that I'd be helping those less fortunate.

 

<div class='quotetop'>QUOTE(JackDodge @ Feb 1 2007, 10:26 AM) [snapback]383835[/snapback]</div>

We shun crack addicts ... while we justify oil addicts. Remember how repulsed we were, a couple of decades ago regarding "Apartheid" ???

Everybody got on the 'divest' bandwagon ... "we must not buy south african goods until they make things right!!" How come we can't get everyone to divest ... or at least threaten to divenst in fossle fuels? because we LIKE it. Mandela would have NEVER been freed if it meant we had to get the oil monkey off our backs.

 

<div class='quotetop'>QUOTE(SSimon @ Feb 1 2007, 11:50 PM) [snapback]384656[/snapback]</div>

How do we measure profit? Let's take a look at a few companies, and see if any of these could be classified as "obscene", using a few indicators of a company's wealth or profit.

Exxon-Mobil:
P/E = 12.40
Profit Margin = 11.48%
Quarterly Earnings Growth yoy: 5.7%
From http://finance.yahoo.com/q/ks?s=DIS

Those are three companies in three different industries, and you could say that both Disney and Google are doing better than Exxon in some respects. Yet, except for some Christian conservatives still mad about Disney's content being geared toward general audiences, neither are accused of obscenity in profit (especially not from me, as I own part of one of these companies as a small stockholder).

So what is obscene about Exxon? Simply that they are "big". So the number ... "158 BILLION in profit!" ... is tossed out like a bone to the populist among us, so they can tut-tut and say how horrible it is. But less than 12% return on your money is not that great. I earned more than that in my mutual stock funds last year.

But then, maybe I'm just "obscene"!

 

Question to those outraged by this:

Are you angry simply because the absolute number is high, or because 10% is too high a return on investment, or because the company is too large?

The high absolute number is high only because the company is enormous. Keep in mind that their market capitalization is $440 billion.

Ten percent return is not out of line compared to other successful companies. If you are upset about this, then you should be upset about pretty much the entire economic system.

The only legitimate issues I see here are:

1. The size of the company, which gives it excessive control over the political life of the nation because of the corruption of public officials and the gullibility of the public who can be influenced in their vote by paid commercials; and

2. The capitalist system itself, which allows some people to reap large incomes without working while others work hard long hours for so little pay they cannot afford health insurance.

 

to compare a few very successful companies competing in wide open product areas is not applicable in this situation and let me tell you why. all the oil companies pretty much have the same margins, at least all the major ones.

when the industry standard for ALL portable music devices is the same as Apple's ipod, then compare them.

same goes for Disney and any other star players in other industriess.

the oil companies are not in that league. Exxon's profits are X times larger than Shell or anyone else because their business is X times larger NOT because their oil or gas products is X times better. that is a huge difference.

if we want to talk about insane profits. lets look at the margins of intel. when i worked there, their margin approached 50%. they carried no debt, banked billions every year and all that after investing 25-35% into R&D while paying their employees very well (american ones anyway)

but very few complain about them. but they make the money they make because of the product they provide.

oil compaanies make the money they make most likely because of the fact that they know we can go no where else so they agree to sell at a certain price and share the wealth

here is an industry that shares the pipelines used to transport the oil around to the end users that which comes frm an association (OPEC) that gets to gether to set the price for most of the oil in the world. believe me, the oil companies take care of their own. there is no competition there

 

<div class='quotetop'>QUOTE(viking31 @ Feb 1 2007, 07:29 PM) [snapback]384178[/snapback]</div>

I think you meant this the other way around: "Put the government in control of the oil company." You could also say: "Put the oil company in the government's control." The way you originally phrased it is probably what we have now. :huh:

Tom