7.1 Billion for Bird Flu Epidemic

[richiebaseball]

No. Actually there isn't. Maybe you learned economics or accounting differently than I did. If so, please enlighten us.

There isn't a difference between profits and profit margin?

Sales - Cost of goods sold = Gross profit.

Gross profit/Sales = Gross profit margin.

No matter how I look at it, I'm pretty certain there's a difference. I can give examples if needed.

 

[momof2inPA]

Sales - Cost of goods sold = Gross profit.

Gross profit/Sales = Gross profit margin.

The NYTimes articles says profits jumped at least 68%, and Bob says sales only increased 33%. Doesn't that indicate that there is a huge increase in profit margin?

 

[richiebaseball]

The NYTimes articles says profits jumped at least 68%, and Bob says sales only increased 33%. Doesn't that indicate that there is a huge increase in profit margin?

Not necessarily.

$1,000,000 in sales - $930,000 in cost of goods sold = $70,000 in gross profit.
$70,000 in gross profit/$1,000,000 in sales = .07 or 7% profit margin.

You can double those figures and the profit doubles to $140,000 but the profit margin remains the same at 7%.

Now I'm not saying profit margins haven't increased, they likely have. Some costs remain fixed even when sales increase and that can increase margins. I haven't read the filings that closely so I'm not sure of their margins. But a lot of the pricing has to do with supply and demand. Specifically China and India. The demand in some places is causing them to pay more. If I had a widget business and other countries were willing to pay me $60 for a barrel of widgets, I would have a hard time convincing my shareholders I should instead sell that barrel of widgets to the US for $20.

 

[Free4Life11]

If profits increased 68% and sales increased 33%, then that could mean the COGS decreased. Therefore, since gasoline is cheaper to produce, Walmart should take over the industry then maybe they would pass the savings on to the consumer

Hell let them do the talking to OPEC, . I've heard stories about how they deal with their suppliers. But hey, anything to get us consumers the best prices

This is all in jest because I don't drive a car and don't give a flying crap about gas prices or the people who constantly whine about them. Be glad you have a damn car in the first place.

 

[momof2inPA]

Not necessarily.

$1,000,000 in sales - $930,000 in cost of goods sold = $70,000 in gross profit.
$70,000 in gross profit/$1,000,000 in sales = .07 or 7% profit margin.

You can double those figures and the profit doubles to $140,000 but the profit margin remains the same at 7%.

Now I'm not saying profit margins haven't increased, they likely have. Some costs remain fixed even when sales increase and that can increase margins. I haven't read the filings that closely so I'm not sure of their margins. But a lot of the pricing has to do with supply and demand. Specifically China and India. The demand in some places is causing them to pay more. If I had a widget business and other countries were willing to pay me $60 for a barrel of widgets, I would have a hard time convincing my shareholders I should instead sell that barrel of widgets to the US for $20.

I understand that demand has been increasing steadily and most of the problem isn't with the amount of oil available but with refining capacity, but I can see no reason that costs would have increased anywhere near 68%. So, I'm sure net profits have increased nicely (1) because of the sales increase due to people hoarding gas in fear of increased gasoline prices due to the hurricane and (2) due to increased prices set by the oil companies, i.e., they stuck it to us after Katrina. That's probably why there's a bypartisan effort to penalize the oil companies.

Funny, I just heard on tv natural gas will be up to 50% more expensive, now what will we chalk that up to besides greed?

 

[LoraJ]

Does anyone elsego "Hmmmmmmm" when they hear that Rumsfeld owns stock (was appointed chairman of the board in 1997) for the company that owns the patent for Tamiflu? This is Donald Rumsfeld, Secretary of Defense.

Instead of selling his stock, he has decided not to make any decisions for the country when it comes to Tamiflu. So basically folks, his stock is more important to him than our safety.

 

[DawnCt1]

Does anyone elsego "Hmmmmmmm" when they hear that Rumsfeld owns stock (was appointed chairman of the board in 1997) for the company that owns the patent for Tamiflu? This is Donald Rumsfeld, Secretary of Defense.

Instead of selling his stock, he has decided not to make any decisions for the country when it comes to Tamiflu. So basically folks, his stock is more important to him than our safety.

And what decision would you like the Secretary of Defense to make about TAMIFLU??? I could see the President, Vice President, the Secretary of Health and Human Services, perhaps the Surgeon General BUT do you really want any SecDef's opinion on Tamiflu anyway???

 

[LoraJ]

I would think he would have some say. Laugh all you want. I believe it is a huge conflict of interest.

 

[DawnCt1]

I would think he would have some say. Laugh all you want. I believe it is a huge conflict of interest.

Why?? Is he a medical or public health expert? Is there another company that makes a drug similar to Tamiflu? Rather than a "huge conflict of interest" I think I am looking at another "huge" conspiracy theory.

 

[Lanshark]

It's about time. They have been warned of this potential for a long time. It's amazing that we're just now taking it seriously.

 

[LoraJ]

Dawn,
Here is where it is a conflict of interest. he will still be participating in decisions on how to distribute the military for quarantine. While i am sure he wouldn't do this, if he was truly evil, he could delay quarantine's etc to allow a little bit more to spread so that he could profit from it.

Call it a conspiracy all you want, I call it conflict of interest.

 

[denisenh]

Why?? Is he a medical or public health expert? Is there another company that makes a drug similar to Tamiflu? Rather than a "huge conflict of interest" I think I am looking at another "huge" conspiracy theory.

Unbelievable...there are no words.

LoraJ
Its just the Bush administration way. Scare the crud out of everyone and make money. No conspiracy there, just the usual mode of operation.

 

[mick67]

Its just the Bush administration way. Scare the crud out of everyone and make money. No conspiracy there, just the usual mode of operation.

Bingo. There's big money in fear.

 

[Geoff_M]

Instead of selling his stock, he has decided not to make any decisions for the country when it comes to Tamiflu. So basically folks, his stock is more important to him than our safety.

Rrrright! Newsflash: You only profit from a soaring stock price if you sell the stock! The only way Rumsfeld would massively profit from his holdings would be to:
1) Dump the stock now at the hyped up price. In this case the conspiracy would be at least make monetary sense.
2) Sell the stock down the road if the threat is real and the stock price holds due to the continued demand for Tamiflu. But if the threat turns out to be real, then it wouldn't be a hoax then would it?

If your hoax theory is true, no flu will materialize, and the stock price (whose price is driven by the potential for future earnings, not current results) will more than likely drop back to pre-hype levels. Therefore Rumsfeld, having decided to not dump the stock now, doesn't "massively profit".

Man, the Left gets more and more reactionary with every passing day.

 

[Geoff_M]

A net income increase of 75% and a 68% jump in profits from two oil companies. No, we weren't sucker punched because of Katrina, the oil companies somehow deserve that money. Yeah, Geoff, you work for big oil, but aren't they getting harder and harder to defend? I know I'm not buying it.

Next will be the post about how no one understands your industry...

(A swing and a miss.) Uh, no.... I work in that other "evil" industry: Big Pharma.

The NYTimes articles says profits jumped at least 68%, and Bob says sales only increased 33%. Doesn't that indicate that there is a huge increase in profit margin?

If profits increased 68% and sales increased 33%, then that could mean the COGS decreased.

Look, take a few seconds and look at the data youselves: Exxon Mobil Q3 Financials

(All $ in millions)
Revenues 2005 Q3: 100,717
Revenues 2004 Q3: 76,375
That's jump in sales of 31.9%

Total Costs + Income Taxes 2005 Q3: 90,797
Total Costs + Income Taxes 2004 Q3: 70,695
That's a jump in costs and taxes of 28.4%

Net Income 2005 Q3: 9,920
Net Income 2004 Q3: 5,680
That's a jump in Net Income of 74.6%

2005 Q3: 100,717 - 90,797 = 9,920
2004 Q3: 76,375 - 70,695 = 5,680

Profit Margin 2005 Q3: 9,920 / 100,717 = 9.8%
Profit Margin 2004 Q3: 5,680 / 76,375 = 7.4%
That's an increase of 32.4%

So, how did Exxon Mobil's Net Income jump a whopping 74.6%? By jacking those prices through the roof after Katrina, right? Not quite. Almost all of the price increase went to cover Exxon Mobil's increased costs.

Let's assume that the Chairman of Exxon Mobil declared that, in the interest of goodwill to people that think that "Big Oil" is evil, in the wake of Katrina Exxon Mobil will not make a penny more in 2005 Q3 as it did in 2004. They'd accomplish this by cutting prices, which would take down revenues. Assuming no tax consequences for simplicity, here's what the numbers would look like:
Revenues: 96,477
Total Costs + Taxes: 90,797
Net Income: 5,680

That 96,477 figure would be reduced from the 100,717 number that Exxon Mobil actually posted. That would only be a 4.4% drop in revenues. So basically, people are getting all bent out of shape over something that's the equal of a 4.4% swing in sales. Forgive me if I don't express outrage over a 4.4% "gouge".

 

[lsyorke]

Does anyone elsego "Hmmmmmmm" when they hear that Rumsfeld owns stock (was appointed chairman of the board in 1997) for the company that owns the patent for Tamiflu? This is Donald Rumsfeld, Secretary of Defense.

Instead of selling his stock, he has decided not to make any decisions for the country when it comes to Tamiflu. So basically folks, his stock is more important to him than our safety.

Tamiflu has been shown in clinical trials to only decrease the flu symptoms by one day. Remember the 1918 flu epidemic also didn't have antibiotics to treat the secondary infections that occur with the flu.. those infections are the real killer. We have those antibiotics today. Sorry, I just can't get all worked up about this one! Maybe I'm jaded, but there's just TO much money being made on this hysteria for it to be altruistic.

 

[denisenh]

Tamiflu has been shown in clinical trials to only decrease the flu symptoms by one day. Remember the 1918 flu epidemic also didn't have antibiotics to treat the secondary infections that occur with the flu.. those infections are the real killer. We have those antibiotics today. Sorry, I just can't get all worked up about this one! Maybe I'm jaded, but there's just TO much money being made on this hysteria for it to be altruistic.

Maybe I am jaded too....but I don't think so.
Bush kept mentioning Tamiflu in his speech (It seemed like several times but I don't have a transcript to check. I didn't know of the Rumsfeld/Tamiflu connection at that time.) Who knows, maybe Rumsfeld wrote the speech.

 

[Christine]

Tamiflu has been shown in clinical trials to only decrease the flu symptoms by one day. Remember the 1918 flu epidemic also didn't have antibiotics to treat the secondary infections that occur with the flu.. those infections are the real killer. We have those antibiotics today. Sorry, I just can't get all worked up about this one! Maybe I'm jaded, but there's just TO much money being made on this hysteria for it to be altruistic.

Sorry, but as I am reading the book "The Great Influenza", I'm hearing that many people actually died within 12 hours of their first flu symptom. This was not a typical flu where you were sick for a week and then died two weeks later from pneumonia complications. This thing went straight to the lungs and, if you were one to get the violent strain of it, you were dead within 12-36 hours of onset. Scary stuff. No antibiotic could touch that.