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.
I read your posts and they are quite juvenile and laughable, what one would expect of DU. You have no rational position which can be discussed. The more you post the more your envy and dislike of Capitalism shows. You would make a perfect Socialist government worker. Have a nice day :)
Woo, Hoo! Let's have $6.00 per gallon gasoline and we can then congratulate Exxon twice as much!
Right now our govt is stifling supply with its regulation, restrictions, mandates and intrusion on oil company efforts to increase supply. We need to NOT penalize or punish our oil companies--and let them find and provide more supply.
Yep, as I said--go figure.
Exxon Mobil does NOT make most of their money selling gasoline in the United States. 68% of their profit is from overseas sources. Most of their US profit stems from upstream operations, not downstream operations.
Gasoline retailing is a totally different business than petroleum production and refining. Many gas stations make more money selling out of their mini-marts than out of selling gas. The markup on a gas station Twinkee is a lot higher than on unleaded gas.
Yep, let's just TAX OURSELVES TO MORE OIL. WE CAN DO IT!!(s/off)
Now, why would it make me FEEL better if the oil companies are forced to pay more taxes? (That they will, of course, pass on to me in even higher prices.)
Because the guvment gets more of my money? Riiiight...
I wouldn't consider it to be low risk. Think about it, all levels of government, up to a R President, is talking about a tax increase to retroactively take that profit. That seems to be a pretty big risk. In addition, they have the risk of weather damage to their refineries, fires, employee insurance etc.
Why would we push their margins below what they can realize with other investments? The average return in the market is 8-10%, they can make 3% in CD's, etc. If we think 9% profit is to much for Exxon, we better be prepared for them to make different investment choices.
They must sell a lot of Twinkies.
I suffered through the rank stupidity and ignorance at the oil company exec hearings last year. There was no way the execs could talk sense into some of the utter fools on that committee. Lee Raymond did say several times that the industry didn't need incentives to drill or lower taxes or anything else but ACCESS to potential sources of energy. But why allow drilling when the enviro wackos and the anti-capitalists have oil companies to blame for their stonewalling?
Some just don't want to be bothered with facts--it's so much easier to express 'populist outrage'.
I agree, drill away. But I don't think increasing supply would be the intended goal, since it would be bad for business.
We won't have to push anything anywhere, when gasoline prices this economy into a recession the market will take care of the matter itself. My apologies to all, eom has the right to make whatever profit the market will bear. If I don't like it, I can ride a bicycle.
As the old economic cliche' states,"If you want more of something--tax it less. If you want less of something--tax it more."
Yeah, it would be horrible for business if you actually got a return on a drilling investment, eh?
Maybe all those folks who bought Expeditions and other wastes of fossil fuel might have been better advised to buy a more efficient means of transportation, eh?
Bad enough I have to watch my rear-view mirror for some soccermom driving a battlecruiser five times the size of what she needs talking on a cell phone and bearing down on my humble efficient Camry -- now I fear she'll be screaming at her Congressman to go after the people responsible for ever larger percentages of energy coming from overseas when in fact the primary culprits are on either end of the conversation /rant off
The only government intervention I would like to see, is a serious move to diversify our nations energy sources.
You're right on the mark with that one. I couldn't agree more!
Guilty as charged...... I didn't see it coming, gas was $1.90 something when I bought my gas hog. Though where I live something big and 4-wheel drive is commonly needed during the winter.
Why is discussing a companies profits in unadjusted dollars deceptive?
The rational used to decry Exxon’s profits as measured in raw dollars, could just as easily be used to argue that minimum wage workers are making RECORD pay. It’s true that the minimum wage is larger (in raw dollars) than it ever has been, a RECORD HIGH!
However, because of inflation, that RECORD HIGH (!) wage doesn’t really buy more than it ever has, perhaps less.
I think some of the public's outrage has to do with what little Exxon did during Katrina during a national emergency. For that, I was also pissed at big oil. Despite that, they have a right to make profit and the profit numbers are similar for decades, so more power to them for the increased market demand and higher scale of dollars coming in the coffers.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.