Exxon Mobil Posts Record Profit

[Jason Tate]

Exxon Mobil “posted the largest annual profit by a U.S. company (http://news.yahoo.com/s/ap/20070201/ap_on_bi_ge/earns_exxon_mobil;_ylt=AgcVYFzNPo1Q y1c6Ny7rP.Gs0NUE;_ylu=X3oDMTA2Z2sza zkxBHNlYwN0bQ--) — $39.5 billion. … The 2006 profit topped Exxon Mobil’s own previous record of $36.13 billion set in 2005.”

[aminorthreat55]

And this is why I no longer purchase anything from them.

[drmsofpsilocybi]

amazing how since GWB reign of terror over this country... all oil companies are some of the only companies that have been receiving record profits (of course at the benefit of the rest of the economy going to shit). Thanks bush.

[saysmydoctor]

How much goes to the CEO?

[cfear]

Yay!

[preppyak]

I remember an economic analyst going on the Daily Show trying to explain this...and her basic response was "it's too complicated, you wouldn't understand"

While I know it is more complicated than simple mathematic terms...in a time where America's economy was nearly being crippled by gas prices, why are oil companies destroying old profit lines with their earnings? Shouldn't they be scraping by too...

[catscradle]

I remember an economic analyst going on the Daily Show trying to explain this...and her basic response was "it's too complicated, you wouldn't understand"

While I know it is more complicated than simple mathematic terms...in a time where America's economy was nearly being crippled by gas prices, why are oil companies destroying old profit lines with their earnings? Shouldn't they be scraping by too...

Exxon's profit margins are 11.46%, which is definitely good, but compared to companies like google, who have a profit margin of 25.96%, it's almost chump change. They may have posted record numbers for profits, but the actual money that they pocket isn't much different from any other successful business.

[Jason Tate]

Exxon's profit margins are 11.46%, which is definitely good, but compared to companies like google, who have a profit margin of 25.96%, it's almost chump change. They may have posted record numbers for profits, but the actual money that they pocket isn't much different from any other successful business.
Why doesn't $39.5 billion in PROFIT mean, "in profit"? Their SEC filings are all available. Profit margin is not what's at stake here -- how much money (and record setting numbers that is) they're making is.

[icameonherface]

Why doesn't $39.5 billion in PROFIT mean, "in profit"? Their SEC filings are all available. Profit margin is not what's at stake here -- how much money (and record setting numbers that is) they're making is.

more demand?

[Shatter590]

I refuse to buy their oil based mostly on the fact that they get it from the Saudis.

[selftitled85]

Why doesn't $39.5 billion in PROFIT mean, "in profit"? Their SEC filings are all available. Profit margin is not what's at stake here -- how much money (and record setting numbers that is) they're making is.

because profit margin is a much more important term. it shows truly how much of a profit they are making.

exxon is making an incredible profit...but as other the other guy said...its not the whole story...if you dig deeper it is not like they made off like bandits. a company like google on the other hand...they made off like bandits.




and you also must take into account what industry we are talking about. oil...an industry which has a large base in the middle east which is a highly volatile area. combined with the fact that almost every country in the world has a growing need for it...combined with the fact that we can only extract so much at a time...means that we have less of a surplus and less room for errors or any types of problems. this means the price will have to rise accordingly because there is a much higher amount of risk now.

[Love As Arson]

If Exxon Mobil were under the mercy of supply and demand, there would not be record profts:

Under perfect competition, one supplier cannot effect prices on the market. The supply curve is flat, therefore, there is no possibility of profit, every entity operates at cost or is forced to leave the market. For example, there are so many suppliers of wheat on the market, that Farmer Brown would be crazy to mark the price up of a bushel because he would be undercut by his competitors, his only recourse would be to drive prices downward to compete. If we apply the same principle to oil, which is a bulk commodity like wheat, we see that there must be something wrong when oil companies are making record profits, if they were in perfect competition, all their profit would be used towards driving down their costs and undercutting their competition. Instead, what one finds is an oligopoly, that is, cooperation by few companies to exploit and drive up prices for the public.

[Jason Tate]

because profit margin is a much more important term. it shows truly how much of a profit they are making.

exxon is making an incredible profit...but as other the other guy said...its not the whole story...if you dig deeper it is not like they made off like bandits. a company like google on the other hand...they made off like bandits.




and you also must take into account what industry we are talking about. oil...an industry which has a large base in the middle east which is a highly volatile area. combined with the fact that almost every country in the world has a growing need for it...combined with the fact that we can only extract so much at a time...means that we have less of a surplus and less room for errors or any types of problems. this means the price will have to rise accordingly because there is a much higher amount of risk now.
I don't think you're understanding what profit-margin is: net income divided by revenue.

[selftitled85]

If Exxon Mobil were under the mercy of supply and demand, there would not be record profts:

Under perfect competition, one supplier cannot effect prices on the market. The supply curve is flat, therefore, there is no possibility of profit, every entity operates at cost or is forced to leave the market. For example, there are so many suppliers of wheat on the market, that Farmer Brown would be crazy to mark the price up of a bushel because he would be undercut by his competitors, his only recourse would be to drive prices downward to compete. If we apply the same principle to oil, which is a bulk commodity like wheat, we see that there must be something wrong when oil companies are making record profits, if they were in perfect competition, all their profit would be used towards driving down their costs and undercutting their competition. Instead, what one finds is an oligopoly, that is, cooperation by few companies to exploit and drive up prices for the public.

you are forgetting that 1) wheat is a substance that is renewable while oil...is not 2) there are substitutes for wheat while for oil...there are not (at least at this point in time)

now if you made wheat into a substance that was scarce...ie: a new bug appears that goes and kills half the wheat around the world every year...the price for wheat would go up a great deal and there would be not as many producers which would in the end lead to what you have no with oil.


you cannot compare something like oil (nonrenewable very difficult to make, a lot of money to make, the largest amount located is in the most volatile part of the world) to something like wheat (renewable, easily cultivated, individually produced, can be made all around the world)

[Love As Arson]

As I said, oil is a bulk commodity like wheat. The point, however, remains that there is no explanation for record profits if oil companies were, in fact, competing, as each would be driving their prices down. Instead, one finds oil companies receiving record profits and driving their prices up. There must be an auxiliary cause e.g. cooperative manipulation of the market.

[halifaxrocks]

oh no... people are buying oil!!!

[icameonherface]

demand higher because of China? Supply getting smaller?

however, taking from Morningstar

Most companies in the oil/gas industry have generated very high returns on assets over the past five years. What's more, over the long haul, this company has posted results that are some of its industry's best. Note that the company's net profit margins--another key profitability measure--have been average compared with other companies in its industry.

Also, their Return on Equity has gone up significantly recently - which is money put back into the company.