$1,318 a Second!

[Virgo10]

But I'm sure they're re-investing all it so that it will benefit the public.

NEW YORK (CNNMoney.com) -- Profits at Exxon Mobil surged 36 percent to a near record $10.4 billion in the second quarter as surging oil prices helped the world's largest publicly traded company soundly beat Wall Street forecasts.

The company's profit - which amounts to a cool $1,318 a second - is the second biggest ever reported by a U.S. company, behind only the $10.7 billion Exxon itself earned in the fourth quarter of 2005.

The Rest of the Story.

 

[Hercules10]

Unfortunately they don't HAVE to re-invest in the public's best interest.

They're in it for the profit and riding the scare wave of what's happening in the middle-east that's driving oil prices through the roof.

Just wish I had a job in the oil bidness right niow. I read where one Houston firm gave Porsches as a bonus to ALL employees.

 

[mtdevine615]

Makes me hate it when I'm at the pump , but I love getting that dividend check.

 

[Bob Slydell]

The largest corporation in the world has the largest (gross) profits in the world -- who woulda thunk it.

 

[NewJersey]

The largest corporation in the world has the largest (gross) profits in the world -- who woulda thunk it.

 

[wvrevy]

The largest corporation in the world has the largest (gross) profits in the world -- who woulda thunk it.

Umm...actually, they're only the "largest corporation in the world" in terms of revenue and profit. By actual number of employees, it ain't even close.

 

[Bob Slydell]

Umm...actually, they're only the "largest corporation in the world" in terms of revenue and profit. By actual number of employees, it ain't even close.

Of course I'm talking about revenue (and assets). Ranking companies by number of employees makes no sense.

I'm guessing the US Government is the largest employer in the world in terms of number of employees. Not exactly a business plan I'd be looking to mimic.

 

[wvrevy]

The data comes from here: Fortune Magazine Global 500

In terms of employees, assets...name the criteria, they are nowhere near being the "largest corporation in the world". Only in terms of revenue and profits.

 

[Bob Slydell]

The data comes from here: Fortune Magazine Global 500

In terms of employees, assets...name the criteria, they are nowhere near being the "largest corporation in the world". Only in terms of revenue and profits.

Ok, still trying to figure out what your point is?

Should I rephrase?

It's not surprising to me that the company that has the largest revenue of all has the largest profit amount as well.

Not saying that the oil industry is not profitable, but when you're talking about record profits in terms of strictly dollars, naturally the largest companies are going to be the ones setting the records.

 

[AllyandJack]

I'm all for businesses making money, but don't lie. All we hear is how they HAVE to raise prices. It's beyond their control. Blah, blah. Just tell the truth. "We're raising the price because we CAN and we WANT to". Don't lie and cry poor mouth and make us all think you're doing your best to keep prices down when, clearly, it's all a big farce. Make your money, but be honest about the situation.

 

[TexDisney]

Ok, still trying to figure out what your point is?

Should I rephrase?

It's not surprising to me that the company that has the largest revenue of all has the largest profit amount as well.

Not saying that the oil industry is not profitable, but when you're talking about record profits in terms of strictly dollars, naturally the largest companies are going to be the ones setting the records.

Of course, because it's circular reasoning. The largest ones are the ones with the most revenue+profits are the largest ones.

Matt

 

[wvrevy]

My point was that saying they are the "largest company" is deceptive, since...well...they aren't, in terms of anything but revenue and profits.

But you might be surprised to learn that they are not the largest revenue producing corporation by very much at all. Their revenue was only about 8% higher than WalMart's, who is second on the list. Their profit, however, was more than three times that of WalMart...and the third and fourth highest revenue companies (both oil companies) produced significantly higher profits than WalMart, despite having significantly less revenue.

Put another way, take a look at the profit margin of these companies, and it's hard to argue that they are not gouging the world for a much needed resource:

Exxon - 10.6%
Royal Dutch Shell - 8.3%
BP - 8.3%

For comparison, here are the three highest revenue non-oil companies:

Wall Mart - 3.6%
GM - (loss)
DaimlerChrysler - 1.9%

There are a couple other companies that have profit margins as large as the oil companies do, but they also have either enormously more assets (human or otherwise) or they have had to be federally regulated to stop them from gouging their customers (read: credit card companies).

Nothing wrong with making a profit, obviously. But is it necessary to make the biggest profits in history when people are struggling to get by?

 

[BunsenH]

If a particular oil company is making higher than expected profits, why not use that as a buffer and lower their prices to grab some market share and goodwill. Why are the prices at all area stations within a few % of each other? There is no talk of shortages. The entire energy industry baffles me. The principles of supply and demand don't seem to apply.

 

[Bob Slydell]

The top 20 companies in terms of profit margin for 2006, per Fortune 500:

1 National Grid - 40.8%
2 Occidental Petroleum - 32.4%
3 Microsoft - 30.8 %
4 Gazprom - 29.2 %
5 Banco Bilbao Vizcaya Argentaria - 28.9%
6 U.S. Bancorp - 27.0%
7 Surgutneftegas - 26.7%
8 Petronas - 26.1%
9 China Construction Bank - 25.2%
10 Rio Tinto Group - 25.1%
11 Daiei - 24.7%
12 SABIC - 24.5 %
13 Rosneft Oil - 23.5%
14 Cisco Systems - 23.1%
15 Intel - 22.3%
16 GlaxoSmithKline - 22.2%
17 BHP Billiton - 21.6%
18 Coca-Cola - 21.1%
19 Merck - 21.0%
20 Oil & Natural Gas - 21.0%

Seems like other industries must be gouging the world, like technologies and banking and pharmaceuticals (ok, they probably ARE gouging people, I'll admit that one ).

Heck, Coke's on that list. Why did my bottle of Diet Coke today cost me $1.00? Shouldn't they be forced to cut their price to $.75? They'd still make a profit on me, right?

 

[kydisneyfans]

You can drink water instead of Coke-you NEED oil to get around. There is no viable substitute right now.

 

[AllyandJack]

If Coke came out tomorrow and raised the price to $3.00/bottle while giving some song and dance about how it's out of their control while raking in record profits, you might be a bit peeved. I don't mind paying for gas for my car or propane to heat my house. I just don't like them thinking we're all fools. I realize Katrina put them in a tough spot. That was a year ago. If they can rebound enough to make those massive profits, they can rebound enough to drop the price. They are choosing not to while trying to use events in the world as excuses. The only event impacting prices right now is the summer driving/flying/boating season. That's no excuse to me.

 

[crcormier]

If they weren't getting government subsidies, it wouldn't be quite as bad.

 

[NewJersey]

I'm all for businesses making money, but don't lie. All we hear is how they HAVE to raise prices. It's beyond their control. Blah, blah. Just tell the truth. "We're raising the price because we CAN and we WANT to". Don't lie and cry poor mouth and make us all think you're doing your best to keep prices down when, clearly, it's all a big farce. Make your money, but be honest about the situation.

The oil companies are not raising prices. The price of oil is in fact mostly affected by supply and demand, with about 20% of the price due to speculation.

Determinants of price of oil:

1) Supply and Demand - Demand is still going to rise because of the developing countries needing it to sustain their growing economy (China and India for example). Also, demand is always higher in the summer months because Americans are driving more. (part of the reason why we saw a 4-5 cent jump around 4th of July).

2) Geopolitical tensions - Standoff with Iran, oilfields buring in Nigeria, problems between the US and Venezuela, and the latest one being the Middle East conflict. These all LEAD investors to believing supply could be disrupted (part of the 20% speculation) so it bumps up the price of oil. Now if supply is ACTUALLY disrupted, say hello to 90 or 100 dollar barrells of oil and about $4-5 at the pump for gasoline.

3) Natural disasters such as Hurricanes. Remember during Katrina when gasoline here in the Northeast (and elsewhere) jumped about 0.75 in 2 days? Supply was greatly disrupted because the platforms were damaged and the pipelines couldn't bring oil from the Gulf to the NE.

4) Gas "boutiques" - There are different regulations many times for different states about what can actually go into the gasoline that is burned in cars. So for example, CA has some of the toughest laws regarding pollution, which is one of the reasons why gasoline is more expensive there. There has to be things added and taken out of it so it can burn more cleanly. Now for example, if CA experiences a gas shortage, oil companies can't then divert gasoline from AZ and send it to CA to alleviate the supply shortage because there are different regulations. These create so called "gas boutiques" or "gas islands." Also, the gov't required the additive MBTE (I believe that's the name) to be phased out of gasoline to replaced with ethanol I believe. The time wasn't long enough apparently and it caused some isolated supply issues, mainly in the Northeast again. This happened earlier in the year because I remember a station near my college had actually run out of gas.

5) Taxes - The federal government has a tax on gasoline as well as state governments. I know NJ's gas tax goes to the funding of the transportation and highway bills. I believe the federal tax is 18.4 cents and here's a link for state taxes:
http://www.energy.ca.gov/gasoline/statistics/gas_taxes_by_state_2002.html



In reality, the oil companies don't control the price of oil or gasoline. They make about 10 cents off that $3 dollars you pay.

And I don't have sources (too many to quote)...I did a paper last semester in college about this very subject.

 

[wvrevy]

The top 20 companies in terms of profit margin for 2006, per Fortune 500:

1 National Grid - 40.8%
2 Occidental Petroleum - 32.4%
3 Microsoft - 30.8 %
4 Gazprom - 29.2 %
5 Banco Bilbao Vizcaya Argentaria - 28.9%
6 U.S. Bancorp - 27.0%
7 Surgutneftegas - 26.7%
8 Petronas - 26.1%
9 China Construction Bank - 25.2%
10 Rio Tinto Group - 25.1%
11 Daiei - 24.7%
12 SABIC - 24.5 %
13 Rosneft Oil - 23.5%
14 Cisco Systems - 23.1%
15 Intel - 22.3%
16 GlaxoSmithKline - 22.2%
17 BHP Billiton - 21.6%
18 Coca-Cola - 21.1%
19 Merck - 21.0%
20 Oil & Natural Gas - 21.0%

Seems like other industries must be gouging the world, like technologies and banking and pharmaceuticals (ok, they probably ARE gouging people, I'll admit that one ).

Heck, Coke's on that list. Why did my bottle of Diet Coke today cost me $1.00? Shouldn't they be forced to cut their price to $.75? They'd still make a profit on me, right?

None of which are in the top 10 in terms of revenue...Kinda blows that "largest company" theory outta the water, huh?

But the point is that, in terms of real profits instead of just margin, the oil industry is gouging the world for a resource that it has to have. I can do without Coke or Microsoft...you can't do without oil in today's world.

 

[AllyandJack]

I get the part about taxes and that's another debate for another time. Road repairs? What road repairs?!

I also understand that there are outside influences.

But, if they're making the same, why are there "record profits"? I guess I don't understand....if they're not benefitting from the price increases in some way, how are they making so much money? Obviously, the price will have to go up for a variety of reasons and that's expected, but I just don't believe that they have to be as high as they are while the companies are making insane profits. They CAN lower the price and get, say, 5 cents per gallon and make a few less billion next year.

It just seems that the consumer is the one giving and they're the ones taking and there should be give and take on both sides.