Posted on 04/27/2006 9:52:05 AM PDT by VU4G10
Exxon Mobil Corp., the world's largest oil company, reported Thursday the fifth highest quarterly profit for any public company in history, posting gains from higher oil prices that were likely to stoke the furor over outsized oil company earnings.
Despite the 7 percent gain in earnings to more than $8 billion in the first quarter, Exxon Mobil said its earnings came in below its record fourth-quarter because all three of its business _ exploration and production; refining; chemicals _ didn't perform as well.
The earnings report comes amid consumer outcry in the U.S. about soaring gasoline prices. The average retail price of gasoline in the U.S. is now $2.91 a gallon, or 68 cents higher than a year ago.
It also comes as Washington lawmakers are looking to appease consumers with various proposals to make big oil companies pay more taxes or provide consumers with some other relief.
In January, Exxon posted the highest quarterly profits of any public company in history: $10.71 billion for the fourth quarter of 2005 and $36.13 billion for the full year.
In the first quarter, net income rose to $8.4 billion, or $1.37 per share, from $7.86 billion, or $1.22 per share, a year ago. Excluding a gain on the sale of an interest in China's Sinopec, the company's year-ago profit was $7.4 billion, or $1.15 per share.
But analysts polled by Thomson Financial were looking for a higher profit of $1.47 per share for the latest quarter, and shares fell $1.02, or 1.6 percent, to $62.08 in morning trading on the New York Stock Exchange.
Howard Silverblatt, a senior index analyst for Standard & Poor's, said the latest profit figure still places Exxon fifth historically among quarterly earnings. Exxon also holds the first, second and fourth spots; Royal Dutch Shell PLC has the third spot.
The company said its average sale price for crude oil in the U.S. during the quarter was $55.99 per barrel compared to $42.70 a year ago. It sold natural gas in the U.S., on average, for $8.31 compared to $6.18 during the same period one year ago.
Earnings from exploration and production of oil and gas rose to $6.4 billion from $5 billion a year ago. Refining profits fell from $1.4 billion to $1.2 billion and profits from its chemical business fell to 949 million from $1.4 billion
Revenue grew to $88.98 billion from $82.05 billion a year earlier. Higher crude oil and natural gas prices and improved marketing margins were partly offset by lower chemical margins.
Placed in perspective, Exxon's revenue for the three-month period was still greater than the annual gross domestic product of some major oil producing nations, including the United Arab Emirates ($74.67 billion) and Kuwait ($55.31 billion), according to statistics maintained by the Central Intelligence Agency.
Exxon said it invested $4.8 billion in capital and exploration projects, a 41 percent increase from 2005.
"In the first quarter of 2006, the results of our continuing long-term investment program contributed to a 5 percent increase in production," Exxon chief executive said in a prepared statement.
Exxon also said it returned $7 billion to shareholders through dividends of $2 billion and buying back $5 billion worth of shares.
ok
I really don't know, I just find it hard to believe that gasoline is fairly priced.
Riiight, because you set the standard of 'conservative', right? If someone disagrees with you, they must not be 'conservative'. Arrogance at it's highest.
My observation is that most on FR do not understand simple percentages.
sandbar, you missed a decimal point ... that was $18 billion to the government, $8.4 billion to Exxon/Mobile, not $84 billion ...
Again, who's doing the gouging, a company that made a 9.4% profit margin or the government, which raked in 2.14 times the amount that Exxon did?
Which do you think contributed more to the price at the pump?
See post #131 for a quick breakdown of the costs. You might be surprised.
No question about it. I'm just astounded by the skewed logic (actually lack of logic) of some on here. I would expect that type of naivete' on DU, but not here. Go figure.
This is a 3% return on assets. A 12% annual return.
What's the big deal?
I would take it from other posts that EOM makes about 9 cents or so per gallon. What were they making per gallon in past years? Has demand increased that much to explain the tremendous increase in profits they are reporting?
That skewed logic is that if one invests a 100,000 and makes 500,000 that s OK!!! However if he invests 1 billion and makes a million then somehow he is a dog and price gouging. I don't see it either but thats the logic.
ROS is a bad measure to use, as it ignore turnover (Sales / Net Assets). A much better book return measure would be Return on Investment.
Investors should also look at market measure like total return to investors. XON is about 13.6% from 1995-2005 -- good, but not as good as Hillary's investment in commodities which returned $100 on the dollar.
Penalty for having a poor educational system in this country compounded by talking heads whose level of understanding of economics and finance is barely above caveman level. How else can we explain people who play state lotteries with big bucks when it is the worst bet in the world?
Do you honestly think that an "increase" to $0.09 on a $2.91 consumer priced good is a "tremendous increase" in profits? Would you prefer that they continue to operate with lower returns than they could get by no-risk investments?
I totally agree with you. I used the ROS simply because the numbers are easier to find and calculate for those who don't understand the more accurate measurement approach.
Do you honestly think that an "increase" to $0.09 on a $2.91 consumer priced good is a "tremendous increase" in profits? Would you prefer that they continue to operate with lower returns than they could get by no-risk investments?
Not necessarily, I was just asking what did they make per gallon in the past. From your answer I take it they are getting higher returns than previous years. As to your last question to me, judging by current profit margins,selling gasoline would appear to me in the current climate to pretty much be a low risk investment.
So, what exactly would you like to see the profit cap set at? It seems to me from your post that you're saying there's a point where profitting becomes "obscene" or "unfair". Would you please quantify that point?
What, exactly, is your solution?
Excluding special items, profit was $1.41 a share, below the average analyst forecast of $1.46 as compiled by Reuters Estimates.
“The increase of the oil price and growth of oil income is very good and we hope that the oil prices reach their real levels,” Mahmoud Ahmadinejad
Mine will and is to drive less and spend less.
Good for them!
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