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

[YellowPanties]

I feel better, and sleep more soundly at night, knowing that all of our billionaires are going to make it through this recession in style.

Sleep well.

[Ramirez]

America is not in recession.

[DMcD]

Off with their friggin' heads ---------

[Ramus]

yes, that and don't buy their products.

[suzukimom]

When George Bush took office the average cost of gasoline was $1.46/gallon.

This fact, combined with record oil company profits and the fact that McSame is being "handled by" the same lobbyists who have already screwed the American people, SHOULD be enough to sink McCain.

Yesterday I spoke with an older woman in the grocery store who told me that because she is on a fixed income, she and her husband may not survive (her word) more of the same Bush policies that McCain offers. I HOPE that many people like this woman will be able to see past the deceptions and distortions of the McCain campaign so that we can elect, possibly a last chance for this country leader, Barack Obama.

[mjt218]

The funny thing about most of the posts on this story is that most of the individuals do not realize how good of a friend Big Oil is to them.

All the US major oil companies, Exxon, Chevron, ConocoPhilips, etc. are small compared to the national oil companies from whom we obtain most of our oil here in the US. When Big Oil makes money, at least a portion of their revenue is staying here in the US as tax dollars. Oil companies pay more income taxes than a majority of our individual taxpayers. Also, a majority of American's benefit from Big Oil dividends and stock appreciation through Mutual funds and 401k's. Oil royalties in the US pay for the national park service, including the Artic National Wildlife Refuge.

Every other country in the world celebrates the success of their national oil companies. Russia is in the middle of a resurgence due to its oil companies. Brazil's Petrobras is one of the most admired companies in the world.

For some crazy reason, we think that our own publicly traded companies are out to get us. This may sound even more crazy, but we should probably actually celebrate Exxon's success. It sure beats the great American automakers and airlines.

[YellowPanties]

Precisely, Dr. Strangelove. Thank you for your elucidation.

[DesertLight]

Apparently, you stumped the panel.

"we think that our own publicly traded companies are out to get us"
No they are out to get them. They want all American Companies here to fail miserably. Misery loves company.

[k6007]

They're internationalcriminals, pure and simple. I just hope I live long enough to see their demise.

[kdublya]

Noone has come out and said it, so I will.

By social contract, I demand 10,000 shares of each US controlled oil company, backdated to May 15th, 2000.

[Ramirez]

For decades oil companies such as Exxon have provided our nation with an abundant, high-quality product at the lowest prices in the industrialized world. That honest practice continues today.

This is a Good Thing, IMO.

[YellowPanties]

You forgot the close tag: [/irony]

[shockmagog]

Hilarious. You had me going there for a minute.

[mjt218]

It would be interesting to see this argument play out in the late 90's when oil was at < $20. It's actually quite remarkable that oil companies managed to make sound level headed investments throughout the low price period to be in a position to benefit from high prices now. I bet business school students will study Exxon for quite some time to come.

[Destin]

Here's something I been brainstorming about since someone earlier today brought up the tax aspect. What's the current deal about "double taxation"?? It still frowned on??

Just wonder, cause look at it like this.... if you invest in Wall Street and have ExxonMobil stocks, natural gas futures commodity stocks, oil futures commodity stocks and coal futures commodity stocks..... since they are all the same thing, shouldn't you only be taxed once for all?? As it is, the govt is quadruple-dipping off our investments. ;)

[Ramirez]

Yes.

But that's not a bug. That's a feature!

[Heavy]

Taxed on our income, taxed on what we buy, taxed on what we sell...you are correct.

[GHO]

...and let the BIG OIL character assassination begin!! I've said it before, I'll say it again, demonizing the oil industry won't solve anything. Maybe we can't drill our way out of this mess, but we definitely can't bitch our way out.

Exxon Mobil profit was 11.6B on 138B in sales - that's 8.5% - a huge dollar figure, but by most corporate standards, not a great margin. Note that gas prices climbed ~18% from Q1 to Q2 and so did Exxon Mobil sales - shows that we used just as much gas in Q2 as Q1 despite the price increase. So much for all this talk of conserving.

Republicans DO have to get out of Big Oil's pockets and fund alternatives.

Dems have to get out of Big Enviro's pockets and accept that we need more oil for some years to come until we get the alternatives worked out. Arguments that more drilling won't lower gas prices are feeble - look at drop in oil price just since Bush rescinded Exec Order (and that was nothing but synbolic). Just adding the threat of new oil drives speculators out and scares OPEC into lower prices.

And Dems need to actually back the alternatives they supposedly espouse. It's not Repubs that are blocking nuclear plants and wind farms - that's all Dems doing that.

[Heavy]

I'm buying a horse.

[Ramirez]

Feeding your SUV is cheaper. Even at $4 a gallon.

[Heavy]

Ok, a mule, llama, camel...whatever I can get a deal on.

[k6007]

Maybe, but like the ad says....some things are priceless.

The End Of B.oil!!!

[k6007]

YES! You repubes, I said it!!

RapeoftheNaturalWorldRapeOfTheNaturalWorld!!!!!

ExterminationGenocideExtinctionDeforestization.............On, and friggin on. For What????

MastersoftheUnnniiiiiiivvvvvveeeeerrrrrrrrrrrssssssssssseeeeeee.

[DesertLight]

You were one of the people crying about NOT drilling and using existing leases. All the while bringing environmentalist to block those existing leases with litigation.

[k6007]

You're d*mned right! We're were also fighting for the re release of the electric car, buying the prius, calling for bio-fuels, investments in concentrated solar panel research, fighting to save the amazon, struggling to keep our natural parks, resources, wetlands, OUT of the clutches of the jabamonsters................. in short fighting for YOUR children!

Thanks for the help.

[RedEyes]

Record profits. Wow. I'm shocked.

Let me clue you all in...Exxon Mobil might very well have record profits every quarter for the rest of time. Well, at least until the mythical "alternative energy" magically appears.

That's what companies are in business for - record profits. And the world population is growing. So we're always going to need more oil. So either get used to it, or pretend to get whipped into a tizzy 4 times a year.

[Ramirez]

All companies are in business for record profits.

Unfortunately for Exxon, net income was only $2.22 a share and their shares fell $2.81, or 3.3 percent, to $81.57 in morning trading.

Exxon is good but they are no Microsoft.

[k6007]

They'remurrderers!

[Heavy]

Then why do they still get government subsidies?

[kdublya]

ixne on crosoftMay.

MSFT has a dubious history of anti-trust rulings against them.

[ContraEgoiste]

Do you know that 50% of cars in Brazil run on ethanol? That is 1 in 2 cars in a supposedly "third world" country.

Ever stopped to think why we are not there? Surely we can at least match a third world country don't you think?

Ever wonder why Cheney made, the once open, National Energy Meetings secret? Wouldn't you like to know what transpired given the current situation?

Now, next time you are rolling down the road, imagine half of the cars you see running on something other than dirty, polluting oil.

[kenbomc]

McCain and Bush on Exxon's record profits- 'Mission accomplished my friends.'

[Grannysue]

I will state this once again, back in 1983 my husband purchased stock in Vineyard Oil & Gas located in Pennsylvania, they didn't take one drop of oil out of the ground, the government paid the company to cap the wells and not drill anymore, all the CEO'S made out like bandits while the stockholders were left holding the bag. Exxon, Mobile, Cheveron, etc., do not want to take the oil from the ground that we know is there in the U.S. they want another give away program to pass (drilling off the coasts) in order to obtain even more money from the goernment, when the hell will people wake up and realize were all being screwed over by Bush the GOP and BIG OIL! I mean look at our economy and look at their profits???

[gifu]

The War on Drugs was fought with our tax dollars supposedly for the benefits of the greater population's security and health.....even Bush admits we are addicted to oil. SOOOO, Where is the "Oil Czar" to purge of us this evil? Where is the help now??? If we did not want a nation of drug addicts, why do suffer a nation of oil addicts? The always right and morally upstanding Republicans started the war on Drugs, where is your war on oil, guys?? Where is all that energy to fight the evil-doers, this time? I would say our there are some definite freedoms at stake here, Mr. Bush....where is the calvary this time??

[sleek]

And King George now can say: Mission Accomplished!

His fat-cat oil buddies who got him elected are now reaping the rewards. Gotta love American "democracy"! Heehaw!

[goodbyehorses]

Its all about the oil stupid!

Heehaw indeed! Thats the GOP for you; grand for the rich to hell with the rest!

[lornejl]

Tobacco companies are nice people too.