RAGE Report: Exxon Mobil "Biggest profit in U.S. history"

Shift518 Automotive
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What recession? LOL.

[source: Exxon breaks record for profit, yet again - Oct. 30, 2008 ]

Exxon Mobil: Biggest profit in U.S. history
Largest U.S. oil company surges past analyst estimates to post net income of $14.83 billion.
By Aaron Smith, CNNMoney.com staff writer
Last Updated: October 30, 2008: 12:36 PM ET

NEW YORK (CNNMoney.com) – Exxon Mobil Corp. set a quarterly profit record for a U.S. company Thursday, surging past analyst estimates.

Exxon Mobil (XOM, Fortune 500), the leading U.S. oil company, said its third-quarter net profit was $14.83 billion, or $2.86 per share, up from $9.41 billion, or $1.70, a year earlier. That profit included $1.45 billion in special items.

The company’s prior record was $11.68 billion in the second quarter of 2008.

The latest quarter’s net income equaled $1,865.69 per second, nearly $400 a second more than the prior mark.

The company said its revenue totaled $137.7 billion in the third quarter.

Analysts had expected Exxon to report a 40% jump in earnings to $2.38 per share, or net income of $12.2 billion, and a 28% surge in revenue to $131.13 billion, according to a consensus of estimates compiled by Thomson Reuters.

Exxon’s stock price slipped by nearly 3% in afternoon trading.

The company’s earnings were buoyed by oil prices, which reached record highs in the quarter before declining. Oil prices were trading at $140.97 a barrel at the beginning of the third quarter, and had fallen to $100.64 at the end.

Compare that to 2007, when prices traded at $71.09 a barrel at the beginning of the third quarter, and rose to $81.66 by the end.

Exxon’s special charges include the gain of $1.62 billion from the sale of a German natural gas company. It also includes the $170 million charge in interest related to punitive damages from the Valdez oil spill off the Alaskan coast in 1989.

The Irving, Texas-based company said it lost $50 million, before taxes, in oil revenue because of Hurricanes Gustav and Ike. The company expects damages related to these hurricanes to reduce fourth-quarter earnings by $500 million.

Despite the surge in profit, Exxon said oil production was down 8% in the third quarter, compared to the same period last year.

The company also said it is spending more money to locate new sources of oil. Exxon said it spent $6.9 billion on oil exploration in the third quarter, a jump of 26% from the same period last year. The company said it began a new program to tap natural gas offshore from Nigeria.

Exxon also has an aggressive program for buying back stock with 109 million of its shares repurchased during the third quarter, at a cost of $8.7 billion.

In a conference call with analysts, David Rosenthal, vice president of investor relations for Exxon, said the company’s “first priority” is utilizing profits to continue investing in exploration programs for oil and other resources.

Rosenthal said the company would also consider using new-found funds to bolster its dividend, buy back more shares and to purchase other companies, but he declined to offer specific details.

Phil Weiss, analyst for Argus Research, said he doesn’t expect Exxon to break any more profit records in future quarters.

“I don’t expect the fourth quarter to be nearly as good as the third because of lower oil prices,” said Weiss.

Analysts also said that demand for gasoline is falling, which could impact Exxon and other oil companies.

“While oil companies benefit from high oil prices in the short run, they might lose in the long run,” Anas Alhajji, chief economist for NGP Energy Capital Management, wrote in an email to CNNMoney.com. “Higher oil prices lead to lower demand, as we have seen in recent months.”

Earlier Thursday, Europe’s leading oil company, Royal Dutch Shell PLC (RDSA), reported a 22% gain in net profit for the third quarter, to $8.45 billion. The company said sales rose 45% to $132 billion.

Exxon is the second-largest company in the Fortune 500 in terms of annual sales, behind Wal-Mart Stores (WMT, Fortune 500).

Exxon’s stock price has fallen about 20% so far this year, The S&P 500, of which it is a member, has fallen about 36%. To top of page
First Published: October 30, 2008: 8:17 AM ET

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Exxon has one of the slimmest profit margins of any profitable US company at like 10%.

They cant lower their prices any more without risking going under. The reason they make so much money is that we buy so much gas.

Microsoft’s profit margin is in the high 20s%, should we crucify them instead?

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I think the biggest reason I don’t like Microsoft, is that Bill Gates is a crappy father. You could argue he’s a good humanitarian, leaving more money to save the rainforest, or whales, or whatever the fuck he’s donating all his money to in his will - But if I were his kids, I would be wicked pissed to know my dad loves Flipper more than me.

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Yeah a CEO’s humanitarian generosity is a great reason to hate a corporation.

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my mother works for Exxon, free 20 gallons of gas each week, excellent profit sharing, not a bad company to work for. What my mothers part in Exxon is they are distribution, where they make a whooping .02 cents on every gallon they sell.

Like Jclark said, if you dont want them to profit so much then maybe you shouldnt consume so much oil

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I duno who you’re talking to with this nonsense, I buy from Hess. It’s a block from my house. :tong

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How do you feel that I know right where you live?

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Pretty safe, considering I pretty much told you?

Edit: I was going to go with some “well you should, since you came over last night” but I figured I better just keep my mouth shut.

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Probably for the best.

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I don’t have to buy Windows but I need Gas. That’s my thoughts. Trickle down effect at its finest. :lol

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People feel justified to bitch about Exxon’s cut because they NEED gas. That’s not their fault, they just have an awesome business model. You HAVE to buy what they are selling at whatever price they want to sell it.

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It’s a good thing they have help from the Gov’t via lobbying and tax benefits.

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They have help from the gov BECAUSE OF lobbying.

You can go lobby for what you want just like they can.

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Yes, Its America’s fault that they make so much money. :lol :lol

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It’s no one’s “fault” but Americans are the “reason” they make so much money.

They sell a product. At a razor-thin profit margin. If they charged any less, they would be out of business. And they STILL make record quarterly profits. How can they be blamed for that? For any other business, it’s a recipe for failure.

Would anyone prefer they were OUT of business so we wouldnt have gas at all?

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Do you think they get help at all due to GWB/Cheney’s affiliation?

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I’m sure the entire US oil industry gets help from GWB/Cheney because they both have a personal financial interest in it.

What does it matter? People want the price of gas to be lower. Gas prices are not Exxon’s fault or decision. They cant be any cheaper.

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Partial fault… price gouging. Maybe I’m not understanding something… but if the price of crude is cut in half… shouldn’t the price of gas be cut in half? ;p I understand there’s still some manufacturers down from hurricane ike… but still. It’s dropped MORE than half… 140 –> 66… yet we’re paying 1/3rd less of what the price was when it was at its highest.

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Not the whole story. Profits are determined by target profit margin. But there are fixed expenses and variable expenses. Even if gas was free, Exxon still has employees to pay, distribution channels to pay for, etc.

Total profit margin will be about the same, but it isnt just a straight % of the price you pay at the pump.

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:bore