Exxon Mobil 2Q profit sets US record, shares fall

"Exxon Mobil Corp. reported second-quarter earnings of $11.68 billion Thursday, the biggest quarterly profit ever by any U.S. corporation, but the results were well short of Wall Street expectations and its shares fell. "

"Revenue rose 40 percent to $138.1 billion from $98.4 billion in the year-earlier quarter."

So are any of us surprised?

I'm sure we will continue to be amazed when we start getting the rest of the oil companies' reports later this week and early next week.

Quick question though - does anyone here think their stock fell because they didn't make "expected" profits?!?! I'm kinda thinking that their stock fell because even investors know that solutions to oil dependency are looming, sales are already dropping significantly, and <ahem> there is likely to be a new leadership in place soon that has been talking about a windfall profit tax.

Just wonder what the intellectual-types on this board think about the situation now that numbers are coming out.

 

I was reading today about British company Centrica, which posted a profit of £1 billion, at the same time raising gas prices by 35%. Their reasoning was that they have to look after their own shareholders.

This is the case for every company. When they say they have to look after their shareholders, they mean that need to enrich those few who have enough stock to actually benefit by the price increase of the energy.

If you own small amounts of stock, when energy prices shoot up 35%, you won't make enough on the stock market to offset the higher costs.

Bottom line - since when is "shareholders" an excuse to rape customers? Especially if those customers do not have a choice, and it's a monopoly? It's almost like saying "Hey, it's not greed, it's an obligation to shareholders". The next expected line is "Oh, ok, in that case you are a wonderful company, honest, who works hard not for itself, but for the shareholders."

Another unsettling issue is that to regulate this industry is not in anyone's interest except the consumer. The government benefits, all sorts of corporations benefit, but not the consumer. Good luck trying to persuade anyone to do anything on behalf of the consumer. Nothing will be done unless it benefits some other, powerful, entity.

Recently, gas dropped in Canada from $1.35/litre to $1.25/litre. That was when everyone realized that people actually do drive less. People started commuting to work by public transit, bicycles, or carpool, and they limit their trips to the cottage, and so on. The "market" (ahem, the oil corporations cartel) adjusts the prices to where they will sustain the most profitability - it doesn't much have to do with supply. So at the end it wasn't necessary to raise the price to $1.35. However, if the usage would not slow down, the prices would stay at that level.

 

Not really. The price of the product they sell went up, so just by even maintaining their current profit margin and excluding anything else they might have done, their profits are only going to go up. Should the company lower their profit margin just because the cost of the product they sell goes up?

 

Exactly. The costs of pulling crude out of the ground and refining it have not increased, at least not nearly at the same rate as the value of oil has risen. Therefore, mega-profits. The oil companies haven't had to do much of anything except run their business, sit back and watch the dough roll in.

And before we get too rah-rah about a possible "windfall profit" tax, just who do you think will be paying that tax in the end? Remember, higher costs for anything are A-L-W-A-Y-S passed on to the consumer.

 

I won't attempt to lay claim to any intellectual status. I have stomped the planet for 56 plus years and have some reflections and opinions....

Bad economic times during election cycles seem to always lead to hyperbole from the politicos. Very little is ever discussed to some of the real drivers behind economic issues. Neither political party wants to tell it like it is, and the party that tells the story which is closest to the truth fears losing.

There is not one oil company, and although there may be conspiratorial plays by some political cartels < oil producing countries > and cutbacks by individual oil producing nations due more to reluctance to allow US based private companies to come in and turn up the tech spigot and thus production, these countries choose to hold fast as their political system minimizes any real political pressures from the general populace.

Venezuela and Mexico are prime examples of this, but they are not alone.

Couple that with a US Congressional majority that won't allow a vote for making the most of US based resources. Then add a bit of a slip by a member of congress' call for socialization of the oil companies based here? I can see the real money in the stock market backing off of their positions.

There is a political segment in this country that is absolutely thrilled with the present oil price situation.

There is a strong political constituancy that is very much opposed to individual mobility in the form of personal vehicles. IMO, that's why much from Washington DC has little interest in car companies surviving and even less interest in the real effects in raising CAFE standards. It's just responsibility and blame shifting with a political component gain.

The price hikes in oil have done more to reduce consumption than CAFE ever could. Regardless, the respite from crisis will likely not be exploited to make the most of what the US may have in the ground...

Consider that oil profits are in inflated dollars based on fiat currencies. The actual values are much less. This is no small point.

The banking debacle has much to do with our economic problems, as well as the head in the sand attitude of inside the beltway politics. Some constituencies relish a crisis. Crisis, real or suggested, can grease the skids to make political strides. Whether these strides are actually regressive in turth, is of little matter in the moment.

I can't see any culprits in the US based oil companies, nor in the big three automakers. I do see major idiocy from our government and media; who are artists in blame shifting. No clearer case of "If you can't dazzle them with brilliance, then baffle them with bull$hit" than the rhetoric being played out right now.

I see these congressional hearings on speculation, oil company profits, banking problems and come away convinced that the tables could absolutely benefit from a reversal of the accuser and accused... and the folks asking the questions and pointing the fingers are actually the ones who should be questioned and spend some time on the witness stand.

The US Dollar Index yesterday was 73.30. Compare that with November of 2007 when it was 98.802. One of the nice or bad things about a "global economy" is how your fiat currency stacks up against the rest of the world players... You have to consider the real value of a profit in the context of absolute worth.

If your holdings and wages are devalued by inflation, and your real property value adjusts down from the bubble land of speculation driven to values that are stratospheric, only then can you look with a clear eye. Only at THAT POINT can any raise or "profit" viewed more honestly.

 

Shell also made 11.6 billion
http://biz.yahoo.com/ap/080731/earns...nds_shell.html

 

Stuff like this makes headlines and the politicians know most Americans are morons these days. Well Exxon is one of the biggest companies in the world so wouldn't people expect them to have more profit than say the locally owned hardware store?

 

And who owns Shell? Shell is currently 60% Dutch-owned, 40% English-owned. AFAIK. I do recall that shareholders would be given an opportunity to approve the plan that Shell Oil Group will become 100% British.

Shell is also very involved in wind power and hydrogen based alternative energies.

 

Saw that one later this afternoon too. Just didn't want to abuse posting priviledges!

Insane amount of money being made out there, huh?

 

Democrat presidential candidate top contributers:
Goldman Sachs $658,430
University of California $495,159
JPMorgan Chase & Co $423,107
Citigroup Inc $393,904
UBS AG $377,600

Top Industries:
Lawyers/Law Firms $21,126,520
Retired $16,722,771
Securities & Investment $9,472,773
Education $8,024,122



Republican presidential candidate top contributers:
Merrill Lynch $258,360
Citigroup Inc $251,801
Goldman Sachs $197,895
Blank Rome LLP $183,076
AT&T Inc $179,930

Top 5 Industries
Retired $15,391,807
Lawyers/Law Firms $6,179,468
Securities & Investment $5,480,732
Real Estate $4,978,084
Misc Business $2,825,074

Not any mention of car companies or oil companies... Now, once again, who is in the crosshairs of political scrutiny and who is getting bailed out? This is not a call for political debate... just an observation folks can make of what they wish.

 

How will they do that? Buy up futures to drive the price of oil higher?

 

If there's one thing I've learned, it's that there is no such thing as a free lunch. Somehow that cost is going to get passed on to us. Bet on it.

Besides, other than the "yeah, stick it to the man!" argument I haven't heard any real reason to slap a windfall tax on big oil. Is it going to help bring down the cost of oil? Of course not. Make a few more bucks for the Gov? Sure. Will we ever see the tangible fruits of such a tax? Ehhh....

 

Because there is no real competitor to oil as a fuel source for transportation. Essentially oil is a monopoly. Use windfall profit taxes to inject in to alternatives (liek electric car startups etc.) and create competition for oil.

This is the reason we're int he situation we are in. Speculators have bought up oil futures as a hedge against the falling dollar. Because oil is our only option, it's a perfect hedge. If there were alternatives speculators couldn't hedge on oil and drive up the price. Sure, they'd find something else to hedge on, but would that have the same impact on our economy as oil prices now that we are essentially required to buy oil to keep the economy going?

 

Crap, that is almost 25% inflationary pressure. Makes that 11.8 billion more like 8.9 billion.