Oil Profits Shatter Records

HOUSTON — Exxon Mobil Corp. reported second-quarter earnings of $11.68 billion Thursday, the biggest profit from operations ever by any U.S. corporation, but the results were well short of Wall Street expectations and its shares slumped 3 percent.

The world's largest publicly traded oil company said net income for the April-June period came to $2.22 a share, up from $10.26 billion, or $1.83 a share, a year ago.

Revenue rose 40 percent to $138.1 billion from $98.4 billion in the year-earlier quarter.

Excluding an after-tax charge of $290 million related to an Exxon Valdez court settlement, earnings amounted to $11.97 billion, or $2.27 per share.

Analysts on average expected Exxon Mobil to earn $2.52 a share on revenue of $144 billion, according to a survey by Thomson Financial. The estimates typically exclude one-time items.

The record-setting results were largely expected, given that crude prices in the second quarter were nearly double what they were a year ago. Natural gas prices were significantly higher too.

But investors expected even bigger profits Thursday, especially after Europe's Royal Dutch Shell reported a 33 percent jump in second-quarter earnings to $11.6 billion, which fell just shy of Exxon's own record earnings from 2007.

Exxon Mobil shares fell $2.64, or 3.13 percent, to $81.74 in afternoon trading.

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Setting U.S. profit records has become commonplace for Irving-based Exxon Mobil. The $11.68 billion topped its own U.S. record of $11.66 billion, posted in the fourth quarter of last year. Right behind that was the $10.9 billion it reported to start 2008.

In fact, if one-time gains like bankruptcy settlements and spinoffs are stripped away from other companies, Exxon Mobil owns the record for the top 10 most-profitable quarters for a U.S. company, as well as the largest annual profit.

United Airlines' UAL Corp. reported first-quarter profits of $22.9 billion in 2006, but that reflected a bankruptcy settlement, not true profit. The airline would have posted a $306 million loss if those gains were stripped out.

Ford Motor Corp. reported profits of $17.6 billion in the first quarter of 1998, but that included a $16 billion, one-time gain from the spinoff of Associates First Capital.

Exxon Mobil, which produces 3 percent of the world's oil, got its biggest boost from its exploration and production arm, where earnings rose 68 percent to $10.01 billion from $5.95 billion a year ago. The main driver was record crude prices, partially offset by lower sales volumes and higher operating costs.

Once again, Exxon Mobil's results revealed a troubling trend at the heart of its business.

Production on an oil-equivalent basis fell 8 percent from a year ago _ a significant blow for a company that generates more than two-thirds of its earnings from oil and gas production. That follows an opening quarter of 2008 when the company said overall production fell 5.6 percent from a year ago.

Excluding last year's loss of its Venezuelan assets, a labor strike in Nigeria and lower volumes because of production-sharing contracts, Exxon said production was down about 3 percent in the most-recent quarter.

Like its competitors, Exxon Mobil said it took a beating from lower global refining margins. Earnings from refining and marketing fell 54 percent in the quarter to $1.55 billion.

For the first six months of 2008, Exxon Mobil said it earned $22.57 billion, or $4.25 a share, from $19.54 billion, or $3.45 a share, in the first half of 2007. Revenue rose to $254.9 billion from $185.5 billion.

Comments

[wolf58]

Mccains answer to exxon's record profit, we must drill more
what a a$$hole
the price at the pump is set by gas companies that are making record profit while still recieving government grants that the GOP gave to them.
Fu*k them all.

[RegularFolk]

A company making a profit, this is just terrible.

[swooge]

A company making an obscene profit without helping out the country that supports it IS terrible.

Exxon/Mobil, Royal Dutch Shell and the rest of the oil companies are making 8% profit on their businesses. The corporate average is 6%. They could easily make 4% profit and still make BILLIONS of dollars for their company AND put billions of dollars back into the publics pockets through lower gas, food and goods prices.

[swooge]

I just looked it up, Exxon/Mobil is making almost 11% profit. WalMart? 3.5% GM? BIG loss.

[DieHardObamaSupporter]

There's a new massa in town. His surname is Oil. Now you may know yours on a first name basis such as Exxon, Shell, Texaco, etc...

[Devver]

NEW MASSA??? Aww DieHard, where have you been for the last few years sweetie? This Massa is not new, and he looks like the love child of Cheney & Bush. Besides if the off shore drilling ban gets lifted, the big oil guys will tell us that there are no profits because they have to pay for construction, blah, blah, blah, and prices will rise AGAIN. The only thing that's really sad about all this is that too many folks won't use mass transit. While I agree that it's nicer and more convenient to have your own car to come & go as you please, I've been bussing and car pooling for the past three years. If more folks would do this, less gas would be sold. Wonder what would happen then???

[Meteor]

Obscene!

[torrrep]

Ok, genius. Let's pretend you're a businessman. I know you wouldn't have the skills obviously but let's just pretend. Now, as a businessman it's your job to maximize profits for your shareholders while also retaining highly educated and skills workers. What should your profit margin be? Yet another question, what do you think the profit margin is for most fortune 500 companies? After taxes, after salaries and wages, after investment, what should be the the profit margin? 25%? 20% 15%? Exxon Mobiles profits were only 8% of their sales. Did their profit increase it did. But did you notice that sales increased over 40%? Do you know what that means? That means as gas prices went up, more and more people were buying gasoline. Now anyone who knows anything about business knows that 8% is not a very big return on your investment. Look at Levi Strauss. They quadrupled their profits. Should we stop buying Levi's? Bank of America had 16.4% profit. Maybe we should shut down that bank. EXXON employs tens of thousands of Americans and Levis Strauss employs Chinese slave workers. Yet you are worried about the profits that EXXON makes and think Levi Strauss should slide. You know nothing about business. I hope I never have to do business with someone as ignorant of Business 101 as you are.

[InfosolutionWiz]

"FLIPPER" JOHN Done Did It Again!!

Big Oil Fuels John McCain's Straight Talk Express

http://au.youtube.com/watch?v=ZQ4eeQzDlgM

http://therealmccain.com/

HERE IS "FLIPPER" JOHN.....

His Candidacy Is An INSULT to All Americans With Common-sense!!!!!

HERE IS MCCAIN Singing The Same Tune Like His Advisor Phil Gramm:

CLICK> http://au.youtube.com/watch?v=0P6bkbdAkFg
----------­----------­----------­----------­----------­----------­---------

BOLD Face LIES ON SOCIAL Security

CLICK> http://au.youtube.com/watch?v=ZgvgBpXPMko
----------­----------­----------­----------­----------­----------­---------

WHY Women Give McCain a ZERO!

http://bravenewfilms.org/blog/41461-why-do-women-give-mccain-a-zero

[ContraEgoiste]

I would love to know what negotiations transpired on Cheney's secret Energy meetings. Meetings that until then had been open to the public.

[Jander]

No U.S. corporation ever made that much in a quarter," Obama said. "But while Big Oil is making record profits, you are paying record prices at the pump and our economy is leaving working people behind."
McCain's response, Obama said, is to propose a corporate tax plan that would give "$4 billion each year to the oil companies, including $1.2 billion for Exxon Mobil alone" and a gas tax holiday that Obama said would only "pad oil company profits and save you — at best — half a tank of gas" over an entire summer.
http://news.yahoo.com/s/ap/20080731/ap_on_el_pr/obama_energy;_ylt=Armw.OjT_TnezlNBzmri8ois0NUE

[meyekle]

LOL, funny cartoon...­.

http://www.mcclatchydc.com/215/gallery/44162-a44166-t3.html

[chicago25624]

I Love seeing my investments pay off. Thank you to all of you who keep buying gas. My retirement thanks you.

[billsmile]

Investments pay off at the expense of somebody else.

Good to know that hardship elsewhere rewards you.

What a great unnatural system our financial one is. In nature such wealth accumulation is impossible. Isn't it cool that we don't obey the laws of nature?

[thromulese]

These companies rape and pillage the American people and our economy, and congress (with the help of some bush enabling dems) gives them billions in tax subsidies.

Yea. That makes sense.

We the people are sooooo screwed.

Congress deserves the very low approval ratings it gets.

That means you Pelosi, Hoyer, Feinstein, Reid, Schumer, and all you other republiCONized democrats.

Take away the subsidies NOW you morons.

[NoBo08]

Speaking of oil. Here is tidbit that will thrill some 27% , anger most 73%. The house just voted to take their summer vacation without voting on OCS drilling. Not a single repub voter for vacation.

This is a very interesting clip:

http://hotair.com/archives/2008/07/31/video-rated-f-for-failure/

[GHO]

Not having much luck getting my comments actually posted - Maybe Huffpo doesn't like anything right wingish.

Anyway, it's apparently time for the quarterly bash big oil hour. Yeah, they're all just evil and should give the oil away for free...yad­a...yada..­yada...Nev­ermind that they also pay billions in taxes and employ thousands of American workers who, in turn, pay millions more in taxes.

You want lower gas prices - easy. First, Repubs DO have to get out of big oil's pockets and support alternative energy. That said, Dems have to get out of Big Enviro's pockets and accept that drilling WILL help in the short term by driving out speculators and in the long term by increasing supply. Dems also need to actually support the alternatives they supposedly espouse. It's not Repubs that are blocking nuclear plants and wind farms, it's the supposedly alternative energy friendly Dems.

[truthynesslover]

closing of the enron loophole would end speculation today!And nevermind the oil co.s get BILLIONS in tax breaks and subsidies.­This whole drilling lie is just to get the leases so they can sell whatever they find to china.Who knew voting for a texas oil man {albiet unsuccessful| would be SOOOOO good for the oil co.s?There­s a sucker born every minute!"P.­T,barnam"

[NMdonkey]

And just what went on during those secret meetings between Dick Cheney and executives from Exxon, then-Conoco, Shell, and BP America in 2001, and why haven't we being told the reasons for the meetings and what was discussed?

[Ramirez]

What is the "Enron loophole"?

[mshazen]

Exactly, I love the thought that drilling would end speculation. What are they going somewhere, no they will be back to screw us some more. Just close the hole and be done with them.

[swooge]

You realize that profits are after taxes have been paid.

You realize that bigoil gets millions in subsidies from the government. Including reduced corporate income taxes, government funding of programs that benefit oil companies, no responsibility for air, water and ground pollution caused by the oil industry and no responsibility for the health problems caused by fossil fuels.

I bet you even know that if these "hidden" costs from pollution and healthcare were factored into fossil fuels that they would be more expensive that non-polluting energy sources.

[GHO]

Yes, I understnad about the taxes - my point was not that the taxes would come out of the profits - the point is simply that this evil "big oil" everyone talks about also pays billions in taxes and provides thousands of Americans with jobs.

[cmaff05]

Yet another good reason for a windfall profit tax on these companies.

[JohnPaulJones]

How much is too much?

[truthynesslover]

Too much is 700 billion going to counties that export terrorism or is that over your head1

[chicago25624]

Give me a number. What is the percentage that defines windfall.

[Egalitare]

I don't know what windfall profit is, but let's eliminate the current $15 billion in subsidies currently given to Big Oil. If Big Oil is still making profits after that (and they will) they can have them.

[RegularFolk]

Exxon Already Pays more taxes then the bottom 50% of wage earners.

[Tenley]

Exxon consistently breaks its previous quarter's record profits -- the *news* today in the business world and in headlines everywhere except the HuffPo is that Exxon's profits (though another record) weren't nearly as large as expected. Honestly, sometimes I wonder whether the HuffPo has a clue.

[LeanLeftAmerica]

In HuffPo News today... Exxon fell far short of its predicted 20 trillion gazillion forcasted profits for '08.... and estimates that it won't be until well into '09 that it has completely taken over the world.

OK... are you happy now.

[WLA]

Can you not read?

[hu.man]

http://www.inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm

From the chart above, one can surmise that since 9/11 and the subsequent Iraq war, we are seeing a continual upswing in crude oil prices upward which reflects the increasing instability in the vital oil rich region of the world. The oil companies, even though they benefit tremendously from the price spikes, are not necessarily happy about the instability. They are not laughing all the way to the bank more so than stashing their gains in the event they have to tap into when going gets really rough in that region.

Oil companies need to survive in order to continue supplying the world with energy and playing their role in the global economic order. They need to buffer against significant losses they can incur if things go really sour. The question to ask Bush administration purveyors is: "Why then, as they claim the overall situation is improving in Iraq and region, are the markets so volatile and the energy prices are soaring which are really giving the exactly the opposite message?" Bush folks have totally and equivocally failed to deliver on their promises of bringing peace and stability even measured by their own market economics metrics.