And all this talk about one oil company making $11B. nobody pays any attention to the fact that Marathon lost $1.3B.

There are two things to remember, first is that the price of oil is not determined by the oil companies, and second, if they did not make a profit then we would be giving them heck because they were stupid.

Bankonit, I have seen enough dealer statements to know what 2% net profit for the dealership is. It's 2% net, bottom line, combination of all departments after deducting all fixed and variable expenses.

I know what fixed ops makes, and that is the only reason that the net manages to get close to the 2%.

Can't be hidden if you know they are hidden. Get real.

Ah, there you go plagiarizing the ethical folks at Enron again...

Don't forget the $32 BILLION Exxon payed in various taxes for Q2.

I mean, as long as we are bringing everything out in the open.....

Kinda funny how government feels justified telling a business how much profit is "enough" huh? Who is holding them accountable for the MASSIVE revenues they bring in from these so-called "thieves"?

Oh Boy.

Gross Margins and Net Income as a % of Total Revenue are really only useful when comparing companies within the same industry. Some industries have huge revenue and thin margins and others like software have high margins. Its pretty cheap to print another install DVD or process a download, but most tech companies have to invest a big portion, if not all of earnings right back into developing new products. They can only speculate whether that money will result in future revenue holding steady, increasing or decreasing. Most have a very low dividend yield...they need to keep all their money to maintain/grow revenue.

As far as Exxon's $11.68 billion quarterly earnings, nice headline but right next to being a meaningless number. All most investors/owners care about is what return they will get on their invested capital. If you buy shares of stock you are now an owner of a certain % of that company. You want to know how much money that company can earn on the money spent on the shares. You care how much of Revenue goes to Cost of Goods Sold, Fixed Overhead and Debt Payments. You care if that company has to reinvest almost all the earnings just to maintain current earning levels or if they can maintain earnings or even grow earnings while giving you back some of your money in dividends. You care about the "quality" of earnings...did they have some onetime gains that won't be regularly repeated or were their earnings almost all "Operating Earnings". What's the chance they will have to write down assets? How much debt do they have b/c debt payments can take funds away from investing in new businesses or maintaining the current business in lean times...they also must be paid before dividends.

So reading through the posted article what sticks out? 11.68b in profits on 138b in revenue...8.46%...I'd have to look at other integrated oil companies to see if that is a good % or not. Exxon shares fell by 2%...well that tells you that investors felt the shares were a bit overpriced compared to the earnings they expect to get now and in the future from Exxon. Exxon spent $7b on finding and producing more new oil...up 38% from last year...STILL oil and gas prodution FELL 8%. They are spending billions more to find and produce oil and gas but are producing less of it! That's not a particularly attractive investment proposition...how do investors feel about the quality of earnings when they read that? What if oil and natural gas prices go down? Exxon is paying up for oil rigs and other equipment, labor, leases, etc and if oil prices fall the production side of their business is going to get squeezed hard. Kind of like what will happen to farmers who are paying up for inputs that have soared in price from land, to equipment to fertilizers now if crop prices fall.

They returned $10.1 billion to shareholdes (owners) in the form of dividends and stock buybacks. Dividends can be good, but high dividend payouts can be a sign the company is having trouble finding good opportunities to invest the money and earn a good return. Again, reading the bit about the increased cost of rig leases and equipment and labor shortages, they have to weigh the risk of spending the dough vs the risk oil prices may drop. The article also mentions the increased nationalism of other oil producing countries. My personal opinion is this has a lot to do w/ production not keeping up with demand. At some point they will want outside technology and expertise to come in and help them get their numbers back up when they drop far enough, but who will want to invest when they got screwed the last time around? But I digress.

The real point is that earnings only matter to the extent they are compared to how much money was invested by the owners and whether those earnings are likely to continue and even grow in the future. Return on Equity is one measurement of how well a company is doing earning money on money that was invested directly in it and on money it has retained from past earnings. ROE is based on book value however so earnings compared to the current share price still has to be considered for new investors.

A decent investment term dictionary can be found at www.investopedia.com or wikipedia.

A pretty clear line-by-line summary of financial sheets such as the Income Statement can be found at www.finance.google.com Scroll down to see...click on the heading for more detail. MSN and Yahoo! have similar info.

When you really think about what a windfall profits tax actually would do it seems crazy. Take money from a company whose business for many years has been to find and produce energy, companies that investors have voted with their dollars are most skilled at energy prodcution and have senators and congressmen act as mutual fund managers and take that money and "invest" it in companies of their choice. If oil companies are unfairly subsidized, I'm all for eliminating the subsidies and creating a level playing field. I hate subsidies whether they are for energy companies, food producers or "everybody must own their own home plans"...again...senators and congressmen deciding where investment dollars should go and it creates more problems that it solves in the long run.

Ramble off.

Some of these read as though the poster believes that the gov't should somehow 'manage' these evil doers. (I tend to put more faith in shareholders.)

Fails completely to recognize that these are "Multi-National' institutions that deal with supply and demand on a GLOBAL basis, not just here in the U.S.

A little thing called 'retained earnings' covers for when those less desireable and pesky little things called 'losses' happen along.

Not to mention capital re-investment in the business to offset the inevitable truths of depletion.

Got a better mousetrap....set it. Tis what it tis. "Hidden Profits" .... I'm with Admin on "Where's the Beef?"

I guess that all you do is add about 50% to any oil company's profit to see what the Gov makes at the pump, when the oil company makes these obscene profits. Oh, and the Gov still makes their's even if the oil guy runs in the red. The oil guys make a good fall guy, but how about the Gov charges on gas? Make them (Oil and Gov) both give a $1,000 each for $2,000 to us.

Good point abut how governmental agencies profit. (BTW Illinois gets a 6% tax on gasoline. Yep, so with high prices here, their share goes up too!) But I still don't want the oil companies to pay us anything. It's their profit, they should keep it.

I can tell you that we shoot for 10% net in our business (electrical contracting) no matter what our volume is, we are very high risk, so sometimes it's much worse and sometimes much better, but 10% is what we are shooting for. The larger the business the more shareholders that are getting a piece of it typically, so the profit number is really not nearly as important as the percentage. And I can also tell you that the government gets one HELL of a lot more than 10% of our volume.

I have no problem with the oil companies making what they make, or anybody else making what they can make, that is free enterprise, and it is what made this country great. If you tax them more all you are doing is raising the price to the consumer, no different than if you tax my business more I am going to pass it to my customers, that is what you have to do, it's called covering your cost of doing business, if you don't do that you go out of business, pretty simple stuff.

Reported today, or at least that is when I heard it. They also paid $4,000.00 per second in taxes, and their cost of doing business is $15,000 per second. They also spent record money on exploration.

Umm, one set of numbers has to be wrong. If they only made $1500 per second, but spent $19,000 per second, they would be posting record LOSSES every quarter.

Nah, the $1,500 every second was profit AFTER they spent $4,000 in taxes and $15,000 in business expenses. Perhaps the $15,000 in business expenses included the taxes, but either way the $1,500 per second is profit after expenses.

Ok, now I understand. $1500/sec is their net profit. Gotcha.