Exxon posts new profit record

World's largest publicly traded oil firm makes $11.68 billion in the quarter, but misses forecasts

NEW YORK (CNNMoney.com) -- Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter.

That profit works out to $1,485.55 a second.

That barely beat the previous corporate record of $11.66 billion, also set by Exxon in the fourth quarter of 2007.

But Exxon (XOM, Fortune 500) profit fell short of Wall Street estimates.

Analysts predicted the company, the world's largest publicly traded oil firm, would make $12.1 billion in profit on $144.4 billion in revenue, according to Thomson Reuters.

Exxon shares fell about 2% in pre-market trading.

Exxon was both helped and hurt by high oil prices. As an oil producer, the company makes a lot of money when crude prices rise. But as a refiner, it must also buy crude oil to turn into gasoline. Exxon is a net buyer of crude.

"Record crude oil and natural gas realizations were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs," Exxon said in a statement.

Oil prices in the quarter were nearly twice as high as the same time last year, while gasoline prices were an average of nearly 30% higher.

Exxon spent $7 billion in the second quarter finding and producing more new oil, up 38% from last year. Still, oil and natural gas production from the company fell 8%. Even excluding special events like a labor strike in Nigeria and seizure of fields in Venezuela, production slipped 3%.

The company returned $10.1 billion to shareholders in the form of dividends and stock buybacks, 12% more than last year.

The big international oil companies have been criticized for plowing much of their profits back into stock buybacks and other programs to benefit shareholders, as opposed to exploring for more oil which could bring down the price of crude for everyone.

Critics charge the oil companies with deliberately restricting production in an attempt to keep prices high.

The industry says it's investing as much as it can in finding new oil, but is having a hard time given the shortage of workers and equipment in the sector.

Recent efforts by countries such as Russia, Venezuela and Kazakhstan to gain greater control of their own domestic oil resources have also hampered the ability of international oil companies to increase production.

With Americans paying nearly $4 a gallon for gas, oil company earnings have been political fodder of late.

Several bills have been introduced in Congress to enact a 'windfall' profits tax on these earnings, or at the very least eliminate manufacturing tax exemption oil companies now enjoy. Presumptive Democratic nominee Barack Obama wants to tax oil companies at a special rate every time crude goes over $80 a barrel.

Most plans would either use this newfound tax money to fund investments in renewable energy, or give it to low income Americans struggling with high energy prices.

But so far those efforts have been blocked - mainly by Republicans - who say raising taxes on oil companies will only discourage investments in finding new oil and raise the price of crude.

Source: http://money.cnn.com/2008/07/31/news/companies/exxon_profits/index.htm?cnn=yes

Wonder how that compares to gross profits per second made by the combined governments in this country?

My point in posting is how wall-street was upset that it was not MORE.

And as a side note, how does government profit? Government itself does not profit. Government CAN award contracts to private companies, which then generates profit, excessive profit in "rigged" scenarios.

Government takes in revenue and has expenses. At the most basic level, that's the equivalent of gross profit.

It does seem strange that the Street would expect more, but that's a completely relative thing that really has nothing to do with gas prices, if that's what you meant (maybe it wasn't).

Too many people get caught up in the high numbers.

Mention profits in the billions and everyone goes all ape and immediately thinks something is amiss or crooked.

All this when the reality is that their profit margin is a mere 8.4%.

No one thought Apple were a bunch of crooks when their margins were above 50%.

Cash flow is not profit.

They were discussing the profit margins this morning on the news. Trying putting this in perspective. McDonalds, Wal-Mart, and a lot of other businesses, all have higher profit margins than the oil companies. People are complaining that big oil is not plowing this back into research and development. All of that is not an overnight thing. Those plans are years, if not decades, in process.

deepv,

Not sure what you mean by the cash flow statement.

I know what cash flow is, just not were the statement is coming from.

My observation is from this quote from Derek's post.



Which is a bit of senseless statement to my thinking as I look at it again.

As many of us are want to do, I saw what I expected to see and was reading it as "posting net profit of $11.68 billion on revenue of $138 billion in the second quarter."

Perhaps it has been too many years since having taken business math and econ, but is not "net income" synonymous with "revenue"?

Can you help me?

The government has cash flow (negative even) but does not have profit.

Of course I realize the government doesn't make a "profit" per se. But they do take in revenue and then spend that revenue on the countless things they are expected to spend it on. Again, at a very elementary level, the difference between the two is the equivalent of a company's gross profit.

My point was to illustrate the same thing Admin is saying - that huge numbers get a lot of attention. When those huge numbers happen to be posted by an oil company, they become a target. It's funny to me (well, not really) that the government's "numbers" are much bigger, but not many people worry about those.

Like admin says big numbers small margins (Most important). If you're looking at cash flow, they still need a healthy profit to purchase their raw materials (Inventory), which are getting more expensive all the time.

It is amazing the way Wall Street sees things. It kind of explains why corporate is so cut throat. You need the stock price to stay high, but at the same time, Wall Street is not always realistic even with guidance.

We might have bitched a bit more if we had to buy 40 of them to put in your trunk every three days.......

Makes no difference.

I will never begrudge a business for taking risks and striking it rich.

Unless we are talking about robber-barons.

Taxing oil companies and giving it to low income Americans... phhtttttttt! Socialism right there that is.... re-distribution of wealth.

How about taxing athletes that sign contracts in excess of 2 million a year? Redistribute that to the fans...

How about taxing boat companies that charge more than $1,000.00 per ft per boat!

How about taxing pharmaceutical companies when a certain prescription exceeds $20.00 for 30 pills! Give that money to the sick....


WHERE AND WHEN WILL THE INSANITY STOP!

I hope Exxon makes billions and billions more just to peiss some more people off!

It's a free market society. Don't like it? FREAKIN MOVE TO CHINA!!