Exxon Posts Record Profits on Oil Prices

HOUSTON — Exxon Mobil Corp. posted the largest annual profit by a U.S. company _ $40.6 billion _ on Friday as the world's biggest publicly traded oil company benefited from historic crude prices at the end of the year.

Exxon also set a U.S. record for the biggest quarterly profit, posting net income of $11.7 billion for the final three months of 2007, beating its own mark of $10.71 billion in the fourth quarter of 2005.

The previous record for annual profit was $39.5 billion, which Exxon Mobil had in 2006.

The eye-popping results weren't a surprise given record prices for a barrel of oil at the end of 2007. For much of the fourth quarter, they hovered around $90 a barrel, more than 50 percent higher than a year ago.

Crude prices reached an all-time trading high of $100.09 on Jan. 3 but have fallen about 10 percent since then.

The record profit for the October-December period amounted to $2.13 a share versus $1.76 a share in 2006. Year-ago net income was $10.25 billion.

Also extraordinary was Exxon Mobil's revenue, which rose 30 percent in the fourth quarter to $116.6 billion from $90 billion a year ago. For the year, sales rose to $404.5 billion _ the most ever for the Irving, Texas-based company _ from $377.64 billion in 2006.

In addition to benefiting from higher commodity prices, the company said its results were evidence of a well-run, globally diverse operation that's investing billions to find more energy supplies. It noted that its capital and exploration spending amounted to nearly $21 billion last year, up 5 percent from 2006.

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Exxon Mobil produces about 3 percent of the world's oil.

Its shares fell 45 cents to $85.95 Friday after rising as high as $87.86 earlier in the session. The shares have traded in a 52-week range of $69.02 to $95.27.

Higher commodity prices in the quarter were clearly evident from earnings at Exxon Mobil's exploration and production arm, known as the upstream. Income rose 32 percent to $8.2 billion from $6.2 billion a year ago.

On an oil-equivalent basis, production increased nearly 1 percent from the fourth quarter of 2006, driven by higher demand for natural gas in Europe. Excluding the expropriation of its Venezuelan assets last year, divestments and other factors, production rose nearly 3 percent.

Refining and marketing, or downstream, earnings were $2.3 billion, up from nearly 2 billion in the year-ago quarter, as improved refining operations offset lower U.S. refining margins.

In the U.S., downstream earnings were off sharply from a year ago _ $622 million in the most-recent quarter versus $945 million in 2006.

Refining margins _ the difference between the cost of crude and what the company makes on refined products such as gasoline _ have been squeezed in recent months as spiking oil prices outpaced increases in gasoline prices and other refined products.

Already, ConocoPhillips has said record oil prices at the end of 2007 helped it post a 37 percent increase in fourth-quarter profit, even as it produced less crude and natural gas than a year earlier. Its quarterly net income rose to $4.37 billion versus $3.2 billion a year earlier.

ConocoPhillips is the nation's third-largest integrated oil company behind Exxon Mobil and Chevron Corp.

Chevron reported separately Friday that its profit rose 29 percent in the fourth quarter, as surging prices for crude oil offset weak results from its refining business. It earned $4.88 billion, or $2.32 per share, from $3.77 billion, or $1.74 per share, a year earlier. Revenue rose 29 percent to $61.41 billion from $47.75 billion.

On Thursday, Royal Dutch Shell PLC, Europe's largest oil company, posted a 60 percent gain in fourth-quarter profit to $8.47 billion on asset sales and higher oil prices. Shell said full-year net profit was a company record $31.3 billion, up 23 percent from the prior year.

Comments

[loki]

I just remember, they will probably have a hearing on capital hill about this. If you recall, last election cycle they pulled the oil CEO's in, wouldn't let them take the oath, and basically questioned them until the politicians received the campaign donations they thought they deserved.
The whores are on the conner, and they smell money!!

[askmeificare]

The government makes more off of every gallon you purchase than the oil companies do.

Who's the real thief?

[ricchase]

I very strongly suspect that Exxon and the others aren't the only ones posting record profits. The Cheneys, Bushs, along with the now familiar group of co-conspirators are no doubt banking (or rather storing) unimaginable amounts of money, as a result of this conjured war. Why else would they allow the American public to be gutted in such despicable ways?

[ricchase]

Only 107 comments so far, to this story of unspeakable greed. I do not consider the lack of response by readers (consumers!) apathetic. I think it is more an instance of disgust with Exxon, Shell and the other oil giants. Just as with the mortgage lenders, the oil industry and its enablers will get the comeuppance they richly deserve. Just a matter of time.

[abbiehoffmansghost]

I just sent a $100 donation to the CEO of Exxon and another one to the King of Saudi Arabia; they shouldn't have to live in poverty.

[castlerider]

It was Bush and Cheney who have been in charge and have looked the other way while oil companies went for our jugular to raise these prices so high. Hell, they profited too.
Thay should be charged for fraud as our leaders who were supposed to protect us, not screw us, and put in prison.

[marko77]

Exxon is making record profits because they can, and there's nothing anyone can do about it.

W says these profits are justified because the oil companies need the windfalls for "research." Right - Research into which new Starter Castle or Yacht to buy.

Might makes right and people rip off others if they can get away with it.

[Destin]

Damn, no wonder gas prices are so high!! They are that way so that Exxon can set profit records. How much sympathy will you have the minute they start crying "But they Democrats haven't let us build a refinery in more than 40 years!!"????????

A refinery doesn't cost that much. They could easy build 100 and still have most of that left as profit.

[forpeace]

*

"Exxon Mobil Posts Staggering Profits"

So does Halliburton!

*

[swift goat pet for truth]

Exxon pays 13% tax on its profits.
What do you pay?

Thanks, GOP!!!

[RGKahn]

And Exxon has yet to pay the fines and for damages done to the people of Alaska by the Exxon Valdez grounding. That was over 10 years ago.

[fact finder]

The answer to this is quite simple. Do not drive anywhere unless it is absolutely necessary. Car pool, if you have to buy food or any thing else do it on the way home from work. Don't go out to eat or to the movies stay home and get to know your family. Hit them where it hurts in the wallet and hit them hard.

[realitytrumpsbull]

If you read the history of the Prohibition, what the government basically did was run around, with guns, and they shut down all the private ethanol distillers. Given, there was some justification for it, in the form of poison gin, but dead customers don't give you your repeat business, which is where the money is, so chances are there were less instances of that than they hyped. There was also a lot of free money in the economy due to ethanol commerce, and people running their cars on it and stuff, and when you've got an oil monopoly to protect, well, ya just can't have that now, can you? I hope they tax Exxon right out of existence, but I'm not holding my breath for that. I am studying home brewing of ethanol, though. Damn hippie dissidents, round em up.
Some things never change.

LOL

[rollingdivision]

Mediocre results for Exxon Mobil. Somewhere between Microsoft and Apple. Of course the profit number is huge because the sales are huge. But the returns are just average for investors. Exxon Mobil brings huge amounts of energy to the market at low mark ups. If you want to complain to someone about energy prices call OPEC.

Profitability
Profit Margin (ttm): 11.59%
Operating Margin (ttm): 17.27%
Management Effectiveness
Return on Assets (ttm): 15.85%
Return on Equity (ttm): 33.33%

Microsoft
Profitability
Profit Margin (ttm): 29.29%
Operating Margin (ttm): 40.70%
Management Effectiveness
Return on Assets (ttm): 22.03%
Return on Equity (ttm): 47.72%

Apple
Profitability
Profit Margin (ttm): 15.37%
Operating Margin (ttm): 19.67%
Management Effectiveness
Return on Assets (ttm): 13.16%
Return on Equity (ttm): 29.06%

[Bobby]

JFK wanted to tax Big Oil. And that was one of the reasons he was killed, along with wanting to get out of Nam, breaking the CIA into 1,000 pieces, RFK going after the Mob and changing the Federal Reserve. A CPA friend of mine figured this out...

For those of you who really do not understand the significance of JFK wanting to change the oil depletion allowance from 27.5 cents per gallon to 15 cents per gallon, here is my explanation as a CPA. The oil depletion allowance allows oil companies to get an automatic deduction of a certain amount for every barrel of oil that they pump. It is a "give me " deduction. The oil companies get it without spending any money. So if you are an oil company and the president wants to reduce the depletion allowance (or automatic tax deduction) by 12.5 cents per gallon and if you are pumping 500 million barrels of oil per year then you will lose (500 million X 12.5 cents) $62,500,000.00 per year in deductions. In 1963 the top income tax rates for the wealthiest taxpayers was 91%. If you were in the 91 percent income tax bracket then a 62 million, five hundred thousand dollar deduction would mean saving 56 million, 875 thousand tax dollars per year. PER YEAR! Do you think that might help make a few decisions?

Exxon has not only made unbelievable profits, as gas has increased from $1.47 in 2001 to over $3.00 now, but they and others will get 75% of the Iraqi oil.

http://www.rawstory.com/news/2007/Paper__Blood_and_oil__0107.html

This is what happens when you have the fox in the henhouse with Dumbya Bu$h/Darth Cheney in the White House. Life is good if you are a war profiteer and Big Oil executive with those criminals leading the way.