RSS 2.0 FeedA Great Day For The Economy: Exxon-Mobil Posts Record Profit
by Doug MataconisI challenge anyone to tell me why this is a bad thing:
HOUSTON — Exxon Mobil Corp. on Friday posted the largest annual profit by a U.S. company _ $40.6 billion _ as the world’s largest publicly traded oil company benefited from historic crude prices at year’s end.
Exxon also set a U.S. record for the biggest quarterly profit, posting net income of $11.7 billion for the final three months of 2007, besting its own mark of $10.71 billion in the fourth quarter of 2005.
The previous record for annual profit was $39.5 billion, which Exxon Mobil reported for 2006.
To sum it up — businesses exist to make profits, Exxon Mobil has made a tremendous profit.
Why is that a bad thing ? And I know there’s plenty of people out there who will say that it is.
I think the shareholders, employees and families of employees of Exxon would agree it’s a good thing. People who drive cars might bitch, but frankly the oil companies still provide fuel at a level low enough to make alternative fuel sources unprofitable so the complaining’s pretty groundless. And the “environmentalists” will definitely bitch, but that’s only because a) they hate capitalism and b) they refuse to acknowledge the fact that all other fuel sources are more expensive than oil and/or just as bad for the environment.
If they want to get rid of Big Oil, perhaps they should plow their money into actual investment in private companies that work on alternative technologies rather than whine about how we should all give up modern life. If they don’t have sufficient resources to do so perhaps they can pool their funds and invest in some Exxon stock first…that appears to be going up :)
Comment by UCrawford — February 1, 2008 @ 6:00 amProfit is not a four letter word and I have no problem with a business making profit, creating jobs and paying dividends to their stock holders. Since I have no knowledge of how the pump price of gas is determined, the only negative thing I can say is maybe they could lower the pump price a little bit and give us consumers a few extra bucks in our pockets. Overall though, they do a pretty good job of keeping the supply line open and the prices reasonable.
Comment by Bill — February 1, 2008 @ 7:00 amBill,
Over in the U.K. I paid about twice as much for my gas there, about $6 a gallon (although that was mainly due to taxes). I can live with $3 :)
Comment by UCrawford — February 1, 2008 @ 7:48 amI’m a shareholder in Exxon (both in the individual company and through my mutual funds) and I do think it’s great. I bought in when it was at $57 and change. Because of bi-monthly purchases and dividend reinvestment, I have ~500 individual shares now. I couldn’t be happier that my ~500 shares are doing great and don’t really care that people who don’t like the evil corporations don’t want to profit from them.
I’m also a driver. Gas today was just over $3.00 a gallon ($3.04/gal to be precise). I use a full tank (16 gal) about every two weeks (I’m actually using more now because of the horrible winter weather here in Michigan). Supposing the average is $3.00/gal (which is a little higher than average here), that comes out to $96/month with a quarterly total of $384 (I’d have to look at my MSMoney records to verify that that’s close to what I’m spending, but I’m sure it’s probably pretty close). If I take my coming stock dividend as a check instead of the automatic reinvestment (which, of course, I’m not going to do), that takes a good chunk out of my total gas costs (a little over $170). If I subtract my dividends from the total amount of gas paid, my total costs go down to about $214/quarter. That $214 divided by the average number of gallons used for the quarter takes me down to about $1.67/gal (if all of my math is wrong, let me know). That said, I still have no sympathy for people who choose to not profit from the evil oil companies. So boo fricken hoo.
What I can’t for now is the news clip where the reporter stands at a gas station (which probably won’t happen around here because of the recent weather) and interviews the guy filling up an SUV while he complains about the gas prices. I think the news stations are actually doing that to poke fun at those people. Every time I see these stories they’re always done with the guy filling up the SUV. I’m convinced that the people behind the scenes at the studio are laughing uncontrollably when these clips play.
Comment by Justin Bowen — February 1, 2008 @ 9:30 amSorry, that should have been “What I can’t wait for now”.
Comment by Justin Bowen — February 1, 2008 @ 9:32 amOkay, I saw the problem. That said, I’m still in much better shape. The math still applies but I simply need to remind myself about how many months are in a year (which is funny since I tutor elementary school kids in math).
Comment by Justin Bowen — February 1, 2008 @ 9:43 amAs long as the profits were earned honestly, more power to them. With the current administration, though, it’s hard not to wonder if they received any favors.
Comment by Jeff Molby — February 1, 2008 @ 9:47 amWhat, you mean like getting exclusive contracts to do oilwork in Iraq under the premise of “reconstruction” because of their access to politicians in the coalition governments, thereby squeezing out competition from smaller local entities?
http://www.iraqoccupationfocus.org.uk/resources/shell_factsheet.pdf
I’m sure that never happens.
Comment by UCrawford — February 1, 2008 @ 9:55 amYeah, I gotta quit buying into all these conspiracies.
Comment by Jeff Molby — February 1, 2008 @ 10:31 amThe also paid $30b in taxes, probably also a record.
http://mjperry.blogspot.com/2008/02/highest-corporate-tax-bill-in-us.html
Comment by Brian T. Traylor — February 1, 2008 @ 9:21 pmI have no problem with Exxon (or Citgo) making huge profits, yet I would also like to see the distributor (gas stations) make their fair share. Gas stations have become nothing more than tax collectors! With the spike in gas prices they are not seeing the same profits from convenience items.
Comment by Amyz — February 2, 2008 @ 7:45 amPutting Exxon’s tax bill in perspective:
http://mjperry.blogspot.com/2008/02/putting-exxons-tax-bill-in-perspective.html
Comment by Brian T. Traylor — February 2, 2008 @ 1:42 pm