Exxon Mobil Profits Soar: Grow 17 Percent

HOUSTON — Exxon Mobil Corp., the world's largest publicly traded oil company, said Thursday that record crude prices helped its first-quarter profit climb 17 percent to $10.9 billion _ the second-biggest U.S. quarterly corporate profit ever.

But the results still fell short of Wall Street's lofty forecasts, and Exxon Mobil shares fell almost 4 percent.

The company's refining operations limited its overall earnings growth, because prices for crude oil rose even faster than the increase drivers see at the gasoline pump.

Lower production to start the year hurt too.

Exxon Mobil, based in Irving, Texas, said earnings for the first three months of the year came to $2.03 per share, up from $9.3 billion, or $1.62 per share, a year ago.

Analysts polled by Thomson Financial were looking for $2.13 per share.

But at $10.9 billion, the profit still ranks as the second-biggest for a U.S. company _ the only larger result in a three-month period was the $11.7 billion Exxon Mobil posted in the final three months of 2007.

Revenue rose to $116.8 billion from $87.2 billion a year earlier. Analysts were looking for revenue of about $124 billion.

"In an environment of high commodity prices, Exxon Mobil's outstanding portfolio of integrated businesses performed well, allowing us to deliver record first-quarter results," Henry Hubble, the company's vice president of investor relations, said on a conference call.

Investors, however, didn't seem overly impressed, as Exxon Mobil shares fell $3.37, or 3.6 percent, to close at $89.70. They've traded in a range of $77.55 to $95.27 in the past year.

The company, which produces 3 percent of the world's oil, said earnings at its exploration and output, or upstream, business rose 45 percent to $8.8 billion with help from higher oil and natural gas prices. Increased natural gas production was more than offset by lower crude volumes.

Overall production fell 5.6 percent from a year ago, in part from natural field declines and maintenance.

In a note to clients, Citigroup analyst Doug Leggate said Exxon Mobil's results "clearly disappointed versus expectations," but noted a "good suite of new projects" will likely keep its production stable in the future _ a positive note given the challenge of finding new sources of fossil fuel.

In March, the company said it expects to invest between $25 billion and $30 billion on capital and exploration projects this year, up from about $21 billion in 2007.

On the refining and marketing side, earnings were off 39 percent from a year ago to nearly $1.2 billion. The company said significantly lower worldwide refining margins reduced earnings by about $1 billion in the quarter. Those margins reflect the difference between the cost of crude and what the company makes on refined products such as gasoline.

Crude prices averaged nearly $100 a barrel in the first quarter, up from roughly $58 a barrel a year ago. Analysts have attributed the spike to growing global demand, speculative trading and a weak dollar, among other factors.

Crude has pushed even higher since, reaching a record $119.93 per barrel this week.

Meanwhile, gasoline prices also are reaching new highs _ and creating financial stress for many Americans. The national average price of a gallon of regular gas rose past $3.62 Thursday.

Already, record crude prices have produced bountiful first-quarter profits for several other major oil companies, despite higher costs and lower results from refining.

BP PLC and Royal Dutch Shell PLC, Europe's two biggest oil producers, posted combined profits of nearly $17 billion earlier this week _ $7.6 billion for BP, $9.08 billion for Shell. BP's earnings surged 63 percent from a year ago; Shell's rose 25 percent.

Last week, ConocoPhillips reported a 16 percent rise in net income to $4.14 billion. Like BP and Shell, the third-biggest U.S. oil outfit far outpaced industry expectations.

Chevron Corp., the No. 2 U.S. oil company, is expected to continue the trend when it reports first-quarter results Friday.

Comments

[RGKahn]

Exxon/Mobile has made the highest profits of any corporation in the history of the world. They also received billions in tax breaks from the government. With all that money they still have yet to pay the decision made against them in Alaska. They are stonewalling and refusing to pay in order to let old age, and nature cut down on those who were to receive money from the suit.

[rollingdivision]

Exxon-Mobil paid nearly $3 in taxes for every $1 in income. Exxon-Mobil"s income taxes of $9.3 billion in Q1 2008 also set a new all-time record for the highest amount of income taxes ever paid by a U.S. corporation in a single quarter.

[dadw5boys]

That money came from the American Citizens all the taxes and all the profits come from the end users.

[billaryisswillary]

Perhaps we should take up a collection for the Board of Directors of this corporation-I'll donate a week's worth of personal fecal matter!

[vincent123]

These horrible gas prices are a perfect example of how powerless we Americans are to effect change thru government. There is no effective way to stop this huge transfer of wealth from the lower and middle class to the rich. This will continue until some major event occurs. Maybe it's time to organize a national strike similar to way the European working class responds to their government when the rich get out of hand.

[allpoliticiansaretraitors]

Oops, I didn't mean you, Rev.

[RevJeff]

I knew that, you were talking to the person who thinks giving money to companies that are making enormous profits is okay. What they don't realize is that these subsidies amount to corporate socialism.

[bigfated]

Fuck Exxon. Thieves. Liars. Polluters. War profiteers. Destroyers of the econony!

[UnbiasView]

Thieves?

Are they selling a product people want and use? Yes.

[RevJeff]

Go to this site and you will see that our government is giving 13 billion dollars to the oil companies. That's a lot of money that they really don't seem to need.

http://gristmill.grist.org/story/2008/2/1/104315/6335

[oh2beinNYC]

REVJEFF - Who is the government to take a companies profits? Where will it stop, why not take a windfall profit from Bill Gates? Warren Buffet? Google? Apple? or any company that someone may believe is making too much money. I don't understand why exxon is still based out of the US when they could move overseas to Dubai or somewhere and pay very little in taxes. This country CANNOT function without oil and there is nothing out there, NOTHING that can take oils place or at least in the quanity that we use it. Let capitalism work, this is not a communist country, despite your best wishes.

[allpoliticiansaretraitors]

You are an idiot.

[RevJeff]

I'm talking about the US Government stopping giving them money when it is obvious that they really don't need it. How is that being communist? Part of our taxes go to the oil companies. Is that right?

[oh2beinNYC]

-RuleofLaw , it isn't very hard , all you have to do is read their earnings report, their 10k or look over any of their financial statements on yahoofinance or any trading website. Sigh. Just another liberal idiot who has no idea how our econmy works.

[RevJeff]

Why is that neocons like you always end up with the name calling? Is it because you all know you are wrong and that is the only defense that you have? Just wondering......

[DesertLight]

Rev. Jeff calling someone a neocon. Okay then.

[mabinog]

Terrible, the Executive Management will have to settle for an 4th, 5th or 6th home here in the States instead of villa in Spain or Italy. Ain't life a bitch!

[StillAmused]

In an effort to explain how profits could skyrocket (if only the price of crude is being passed along to customers at the pump), Exxon produced its chief accountant, Professor Backwards.

When do the Congressional hearings begin? Wanna see prices drop overnight?

A subpoena is a wonderful price cap.

[timothe]

I don't know. Most businesses can't survive on 7.5% profit margin.

Oh...did they forget to report that part of the story? Why yes they did!! I wonder why.

That's right. Exxon's profit margin is 7.5%, which is very small for a corporation that produces goods. They could make just as much profit or more by simply investing their fortunes into the stock market, rather than pumping oil.

And that's the danger the libs don't see. If you tax corporations for the purpose of punishment or wealth redistribution, then those corporations will either cease to exist or they will move their money elsewhere. Then what? $600 oil? $20 per gallon gas?

[StillAmused]

... none of which answers the simple math problem I posed.

"They could make just as much profit or more by simply investing their fortunes into the stock market, rather than pumping oil."?

And you could be a brain surgeon, instead of posting here.

Pumping oil is what they DO, and we're talking about how they realize astronomical profits while claiming they're simply passing along increased crude prices.

[RevJeff]

Here's an idea. Take all the subsidies that we are paying to the oil companies and give them to organic farmers. This would benefit the American people in a couple of different ways. First it would bring down the price of fresh vegetables to a level where people in poverty could actually afford them, helping with America's obesity problem. Eating organic would get all the chemicals and synthetic hormones out of our food supply which would also help with America's health. And finally, the oil companies would be paying for things they should have been paying for all along.

[DesertLight]

I guess my big question then is how do you just get oil companies to pay subsidies legally to farmers? How does all that happen?

[RevJeff]

The oil companies are being paid subsidies. All you need to do is stop paying them the subsidies and start paying them to organic farmers. The oil companies are getting subsidies right now from are government. How insane is that?

[RevJeff]

Simple, the subsidies were enacted by Congress and can be redirected by Congress. Simple, though probably not too easy.

[DesertLight]

The problem is that if you could use every available acre of land to grow all the corn/ethanol you wanted, you could never produce enough to keep up with the market pace. In addition, ethanol is costly to produce as well. Ethanol is more of a cleaner fuel idea than a viable alternative replacement.

[RevJeff]

I'm not talking about producing ethanol, I'm talking about producing organic food for people to eat.

[wheelskeepturning]

The small way I protest big gas companies is by not using them. I avoid Mobil, Exxon, Shell, BP, Citgo and ANY station that makes you pay more if you use your debit card. Basically I guess you could say that I use the cheapest gas possible. If by some chance the gas comes from some offshoot of one of the big companies at least I am paying the cheaper amount. I think everyone should quit using their gas for one week. Ok since everyone doesn't seem to like the gas tax holiday, how about everyone using the cheaper stations for one week, avoid them at all cost, no gas, no snacks and I bet you would see a change real quick. You know what they say, follow the money. Please don't say that I am hurting the owners of the stations I boycott, they don't have to choose to work for people who openly rape our cash flow everyday, everyway they can.

[RevJeff]

The way that I protest the oil companies is that I rarely use them. I bought a diesel and I use B20 which means that 20% of every gallon of fuel is only 80% diesel. I also get 28 mpg in that car. I ride my bike and take the bus as much as possible. I am pretty proud of the fact that yesterday my fuel gauge hit empty and the last time I filled up was 01/01/08. I have a 20 gallon tank, and when you take out the 20% bio-diesel, that means in four months, I have used only 16 gallons of diesel.

[RevJeff]

That second statement should have been that for every gallon of fuel, 80% is diesel.

[DesertLight]

First of all Exxon and Mobile are one company. Then add Conoco-Phillips and Chevron. Next, what you might consider is that those large companies you mentioned are pretty much the ones who pull the oil out of the earth then generically sell it to the company like LUV's, GASTOWN, Bob's Corner Gas etc. So, you really aren't hurting anyone here. It is a process called housebranding. It happens with virtually everything you buy from clothes to appliances to lawn mower engines.

Conversely, I decided to provide for my future by buying in oil stocks from everything from the hole in the earth to the nozzle. And it doesn't bother me what they charge or how long I have to wait to get it. I just feed my own pocket and smile at all the people at the pump. FYI, the oils have produced nothing less than 30% profit per share plus dividends. You can't get 30% on your dollar everywhere and the sooner you start the better off you are.

[indypete]

Very un-lib of me, I know, but I have to confess to having my IRA tied up in ExxonMobil and LockheedMartin. (Cheney is my investment adviser!) I figured the old adage, "You gotta jive to survive" fits the situation however much of a hypocrite it makes me look. Unfortunately, the tank in the car eats the profits from the oil stocks and then some. I think I'll just hang myself!

[Rule Of Law]

Exxon, formerly known as Standard Oil (before antitrust forced its breakup) and founded by John D. Rockefeller, whose heirs still have considerable holdings in the company. Rockefeller, who at his height, had a personal fortune that in todays dollars was estimated to be about $300 Billion! That would make him at least five time wealthier than Bill Gates, and in his time, the wealthiest, most powerful man on earth. I would be interested to know what the true worth of the Standard Oil heirs is, and where they really fit on the list of world's wealthiest.

[falco]

And isn't it amazing that none of the Rockefellers are listed as the "richest person in the wolrd"? Here is a good link about these greedy pigs. Why in the world would a small group of people want to gouge the world? Ask the Queen of England the same. No, those of us who complain are not socialist or communist (although we could be soon if the Rockefellers get their way) but are dumbfounded at the notion that people who make and have this kind of wealth want to see the rest of us struggle, or even worse, people starve to death as they do all over the globe. Rotton greedy pucks. It's almost as if they are inhabited by an alien race, not of this world.

http://www.rense.com/general81/big.htm

[BPCentrisAmerican]

I guess the CEO will have to take a pay cut, what to do, what to do?