Exxon Profits

[ArcticDiver]

How do you define E-M as an "American Company"? Because their headquarters are in the US? Or, by where the owners (stockholders) live? Or, by where they get most of the oil they sell? Or, by where they convert the raw material into saleable products? The answer will be different depending on criteria one uses.

Frankly, I have no problem with Exxon making as much money as they legally can. But in today's global economy I don't think one can ever indentify a publically held global company like this as representing any particular country.

I just wish they would quit stonewalling on paying the Exxon Valdez oil spill settlement money.

 

[merxlin]

Apparently, you do.

What inflated costs are those? Moving crude oil through war zones? Exploring in ever more remote, hostile, and inaccessible spots? Dealing with irrational despots and governments pushing nationalization of resources? Costs associated with weather related disasters?

And, I'm pretty sure that supply and demand isn't a BS concept.

Many companies make a lot more profit than this, as a percentage of revenue, and the prices for a lot of the goods they manufacture or services they sell have increased more than the price of gasoline over the past 10 years. Are they gouging us too?

When the oil companies were losing money, were you bemoaning the fact that they couldn't make a profit and how terrible it was for them and their shareholders? Perhaps offering to pay a bit more at the pump so that they could break even? Doubtful. But now that they're in the black (for the time being), you want them to hold prices down because you need what they're selling. Hmmmm.

1) I do not have a problem with companies, especially American companies, making a profit. I do have a problem getting gouged. IF the costs (that caused the prices of gas to rise as much as they did) went up like we were led to believe, then profit margins should typically decrease, not increase, unless the company uses a static margin, meaning they will make the same percentage regardless of the cost. That is a business strategy, and one they are free to use. However, costs are easy to manipulate.

2) I don't think anyone Will argue that the "supply" of crude is manipulated by both our oil companies and OPEC, etc.

3) They may be gouging us, they may just be using the free enterprise system which is fine. How many have government subsidies, or have government taxes applied to them? (Alcohol and tobacco are acknowledged).

4) Tell me what oil company went bankrupt and when?

Funny, my original post was really just about how the profit situation would be spun in the media, not a question of whether or not the company deserved to make a profit. I'm not sure where the impression was made that I was anti-profit. I'm not. I am anti "put the screws to me at the pump". Oil is not about $60 a barrel, yet prices are down 25%. Much of the highly inflated pricing was because they could get the public to believe there were all these mitigating circumstances.

This could all be moot. Lets get the wells in the gulf of Mexico drilled, pump that stuff here, and we'll all be paying $2 a gallon again. Just sell your stock first.

 

[OHGoDive]

Tell me what oil company went bankrupt and when?

Texaco, 87-88? somewhere around there. For a lot of the same reasons that oil companies today struggle. Nationalization, wars, etc.

Numerous other big oil companies have been swallowed up due to their inability to make money during troubled times. They didn't declare bankruptcy, but only because someone came along to put them out of their misery. I don't remember anyone crying for them.

I'm not sure where the impression was made that I was anti-profit.

I think this is where I got the impression:

Exxon Profits

Put your hip boots on and cover your noses, it's the quarterly time of year when we get to hear from the oil companies about how they are barely sqeeeking by......

 

[drbill]

I think the issue is not profits, but excessive profits. Given that E-M is only making 10% profit on their sales that may or may not be excessive depending on how they "cook" (or is it "refine") their books. A slip of just one percentage point in profit would mean a lost of almost $4 billion.

I think some would say that in a high (dollar) volume business sector like this, smaller profits (perhaps in the 3-5% range) are more than adequate. However, I know in the low volume businesses that I've been involved in, we often needed to make 20% to get a decent return.

 

[DiverBeth]

I don't think there is anything wrong with a company making a profit. Isn't that why they're in business? The question is what do they do with their profit? Do they distribute it to the shareholders? Reinvest in capital expenditures, R & D, or just accumulate it? Or do they pay whopping bonus to the CEO and other top officers?

Personally, if I made what these CEOs make in a year I would retire and put out my gone diving sign. Even after taxes I could live the rest of my life very comfortably.

 

[merxlin]

I think this is where I got the impression:

Please see post #7

 

[SparticleBrane]

Ironically enough, oil companies don't set the prices for oil. The prices are set per barrel by commodities traders....so if you want to blame someone, blame commodity traders and not oil companies.

 

[Hank49]

One reason they make a big profit is the huge, unneccessary volume of fuel into America for the ridiculous gas guzzlers that are being produced....again. It amazes me to see the auto commercials on TV nowadays..."0 to 60 mph in 3 seconds....350 horsepower...yeah...". Are you kidding me? Then people buy a car like that and complain about the price of gas? This is the 70s all over again when the US auto industry didn't respond to the first big price hike and Detroit had huge layoffs etc etc.

 

[richtpe]

Bet you don't ***** about the starbucks markup on a coffee bean eh?

about that .99 big gulp, only a 92% profit margin there.......

I don't go to starbucks or buy big gulps. I don't need to get coffee or soda to get to work. I do need fuel.

1) I do have a problem getting gouged. IF the costs (that caused the prices of gas to rise as much as they did) went up like we were led to believe, then profit margins should typically decrease, not increase, unless the company uses a static margin, meaning they will make the same percentage regardless of the cost. That is a business strategy, and one they are free to use. However, costs are easy to manipulate.

The clearest way to tell if they were bs'ing when they said gas prices increased because of the price of crude would be to look at their gross margins (basically how much % profit they made just from selling the oil they purchased, ignoring all other costs - which you're correct in saying are easy to manipulate). Based on their 9/30/06 quarterly report (10-Q) their gross margins increased from the same period in 2005. A static margin I would have been (somewhat) content with. I'm anxious to see what it looks like when they release their annual 10-K.

I hate being gouged at the pump while being fed a bunch of bs that it's not their fault prices have increased, while all they're doing is really playing on media-fed public perception that since crude prices have increased, you better be ready to pay lots more at the pump.

I'm all for profits too. I'm against being played for a sucker when I'm emptying my pockets to buy something that I have no choice but to buy. I'd almost prefer they just say "we raised gas prices because of higher priced crude...and also because we can."

 

[mrjimboalaska]

One reason they make a big profit is the huge, unneccessary volume of fuel into America for the ridiculous gas guzzlers that are being produced....again. It amazes me to see the auto commercials on TV nowadays..."0 to 60 mph in 3 seconds....350 horsepower...yeah...". Are you kidding me? Then people buy a car like that and complain about the price of gas? This is the 70s all over again when the US auto industry didn't respond to the first big price hike and Detroit had huge layoffs etc etc.

Does this mean I will get a great deal on the new Suburban I'm in the market for...