"Exxon Profit Down 33% in the Fourth Quarter": Please Pity Poor Exxon!

Yes, that's the headline on CNBC.com. "Exxon Profit Down 33% in the Fourth Quarter." That is the kind of whitewash phrasing that might well have been cleared by that great partisan and advertiser of oil themed beneficence, the American Petroleum Institute.

You see, the real headline would have been inelegant in this day and age of economic hurt, job losses, and spiraling recession, namely:

"Exxon Mobil Reports Record $45.2 Billion Profit"

That's right, higher than the $40.6 billions record all-time high they gobbled in for 2007. And that's profits. You can imagine the dimensions of their cash flow when you add on depreciation, depletion allowances and royalty offsets, in all likelihood enhanced by a chummy Interior Department.

How many Americans would have a little more in their savings accounts to see them through tough times, or even just walking-around money if they hadn't been extorted by the oil companies and their allies at OPEC, mouthing the blather of "its all about supply and demand," while hiding behind a cartel-driven environment and a speculator-driven and corrupted commodity market, a snoozing and oil allied government, and then regaling and frightening us with such daily nonsense as "Unrest in Nigeria," "Fog on the Houston Ship Channel," "Hurricane Gustav is coming," "The industry is pumping at capacity," "Peak oil has arrived," "It's freezing in Maine", "blame it on the dollar", "it's the money supply" and, not to be undone, ExxonMobil's Chairman Rex Tillerson oil industry's Gettysburg Address, "ethanol is moonshine"? The list goes on endlessly. Virtually each new high in the price of oil was enshrined with a new alibi.

Thus was perpetrated probably the greatest heist in industial history, with a Bush administration cheering all along the way, obliviously dumping more oil into the Strategic Petroleum Reserve without any consideration as to price nor economic hurt. Thereby permitting the runaway dumping of the savings of millions into the coffers of the ExxonMobils of the world and their ilk.

But wait. Don't go away. It hasn't stopped. And remember even at today's prices, oil costs some 100% more than when George W. Bush took office (can you say the same for your home?).
The brainwashing continues and has evolved a new tack. You see, now we are being told that oil prices have to go up. "Energy Chiefs Say Oil Prices Must Rise to Ensure Supply," cautioned a January 29 Reuters report from Davos. "Many in the industry see $60-$80 as a more desirable level, up to double Thursday's price of around $41 a barrel". Ah, Davos, instructing us from on high to let us all know what is in our best interests. "That seems to be what you need to get investment," according to the arms length opinion of Tony Hayward, BP's Chief Executive.

As for OPEC? Please see "OPEC's Noble Cause" (12.17.08). And to quote OPEC's Secretary-General Abdullah al Badri, "OPEC will not hesitate...Even with $50 we cannot have a decent income for our members." Well, the gang down at Irving, Texas, where ExxonMobil is headquartered is certainly cheering him on, hoping he succeeds brilliantly. And surely in anticipation, the guys and gals at Exxon went on a buying spree this last quarter, purchasing 119 million shares of their own common stock for some $8.8 billion.

By the way, just to show you the enormous pricing pressure our friends in the industry are under, one of ExxonMobil's brothers in arms, Royal Dutch Shell's fourth quarter earnings fell by 28 percent to only $4.79 billion. Tough times these, especially given all the hurt and pain we are beginning to hear from the oil patch, their cohorts and flacks. This "steep" decline will surely curtail their exploration and new investment budget? Perhaps, given their priorities. You see, but it hasn't stopped Shell from doing what virtually no company on the face of the planet is doing, nor is able to do just now. They are raising their dividend!

Comments

[TxAggie]

Still working on the details of that nationalization plan?

[atlantajoe]

Exxon has extorted nothing, nobody is forced to buy gas and if they don't like exxon they can but it from CITCO and chavez. How many times have we seen idiot dems in congress pull these guys in and blame them for price fixing yet after the hearings we hear nothing about throwing these guys in jail.
The reason they are not in jail is because they have broken on laws. Ghetto idiots like Maxine Waters were bashing these guys yet can't even speak a coherant sentance. Remember her stumbling over the word socialize ?

[JPHR]

The only to break oil's grip will be to tax it more so society will adjust its use of energy sources.
By the way you are not entitled to other countries resources. If they want a higher price it is either you pay or you stop buying and hope they will lower the price because they need income too. Their cost of production is of little or no relevance if the cost of your own production is so much higher.

[TheBrizz]

I'm tempted to get my violin and play a really sad song... but I had to sell it when I got laid off and lost my home to foreclosure.

[ccclj]

How many US employees did Exxon lay off this Year? oh thats right NONE! And my condo is up 130% since I bought in 2000, wish I sold it last year when it was up 250%

[dessertsfirst]

My heart really bleeds for 'em.... NOT!
I can't forget that friends whose livelihood depended on the Alaska waters ruined by the Valdez oil spill, nearly 20 years later are still waiting on compensation from this oil giant. While it is true, Exxon spent countless millions to clean up the mess, as well they should, they have appealed countless times the amount of monies to be distritubed to the victims--workers who will never be ale to recoup their losses from lost employment. The courts feeling sorry for all the millions Exxon spent on the clean up, mandated that they only pay $500 million to the 30,000 worker-victims.... a pittance compared to the billions they are profiting every quarter (of course, except for this one)... and guess what? Exxon has appealed the amount again. It's absolutely appalling. A pox on them all!

[jqcitizen]

Poor Exxon. Once again breaks their own record for profits and cries poverty.

This is the same monster that totally destroyed the fishing industry in Prince William Sound by allowing a known alcoholic to captain their oil tanker (EXXON VALDEZ) onto a well marked reef.

A decade later the Supreme Court felt sorry for this 'poor' monster and said the punitive damages awarded to Alaskan fishermen was too high.

Just a few months ago the Governor of Alaska (Sarah Palin) was asked if there was even ONE decision the Supreme Court had made that she disagreed with. Her answer was "No".

She has to be as goofy as they get considering she claims to be a Commercial fisherman.

Seems like Exxon owns her and the court as well.

[Vyvjala]

Exxon is the kingpin of the corporate mafia, scary isn't it........­..........­.

[harveyr2]

More "big oil is bad" nonsense. Let's take a look at the numbers.

Exxon paid $36.5Billion in corporate income taxes in 2008 (total taxes paid of $166B). See http://www.exxonmobil.com/Corporate/Files/news_release_earnings4q08.pdf

During fiscal year 2007 (ended Sep 30, 2007), the latest year that data is available, the US government collected $394B in corporate income taxes. See www.irs.gov/pub/irs-soi/07databk.pdf for the complete report.

So one company, Exxon, represented nearly 10% of the total corporate income tax collected by our government. We should be glad that such a large company is focused on delivering profits that help fund government services. There is no other large oil company, in the world, that deploys capital as effectively (not state owned, not private company).

Note: I don't work for Exxon and I don't own Exxon stock.

[bkbigfish]

Excellent! You beat me to posting that very same thing. Also: Exxon paid more in taxes in 2007 than the ENTIRE bottom 50% of income earners:

http://seekingalpha.com/article/63131-exxon-s-2007-tax-bill-30-billion

Not to mention, they employ over 100,000 people. So yes, their profits DO matter, Mr. Learsy. You see, the profits allow them to expand, giving them the ability to employ even more people. Econ 101!

[americanideal]

And their profits prohibit the growth of the thousands of companies and citizens who rely on their product for their businesses, keeping them from employing more people and expanding their impact. Industries including:

- manufacturing
- trucking
- airlines
- agriculture
- biotech
- energy

Need I go on? That's not only Econ 101 "professor" bigfish, that civics 101, morality 101 and common sense 101.

Oh these poor persecuted oil companies - how dare we question their right to seek greater profits for their "owners". Myopic nonsense.

[lj9283]

That means that in pre-tax dollars Exxon made $81.7 Billion in profits. (45.2+36.5).

$81.7 Billion in profits for Exxon.

Wow.

[americanideal]

Harveyr2 has just captured the most aggregious and outreageous comment of the year award.

What a sham.

First off, these companies are BY FAR the leading lobbiers for less restrictive corporate tax policy, in the name of "freeing capital for exploration and R&D." Their millions funded the first round of cuts, for which they were the biggest beneficiaries, and continues to pressure Washington to make lousy fiscal policy choices.

Second, since when does paying all these taxes change the sheer volume of post-tax PROFIT they are still walking away with. This argument is such nonsense, as if the fact that you pay all of these taxes it somehow leaves you open to gauge the public for whatever price you need to load your coffers with record profits. If anything, the enormous tax "contribution" these companies make further reinforces how dominant an impact they have on our overall economy. Does your argument somehow imply that our oil companies have become too big to fail, lest our government suddenly go bankrupt without their generous contributions? I'll take my chances, thanks.

By the way, instead of "being glad" one company is delivering profits to "fund us", why don't you take a moment to consider how much more profitable thousands of companies and citizens would be if their bottom line wasn't destroyed by the selfish and disingenuous pricing from our dear oil companies.

Get real.

[harveyr2]

Exxon's profit margin was 9.5%. Not excessive. Not windfall. And certainly not gouging its customers. There are many Fortune 500 companies whose profit margin is greater than Exxon's.

Oil prices are set in an open market where speculators, investors, producers and consumers participate and set the price based on the facts of current supply and demand and the expectations of future supply and demand. If you are bothered by the oil prices/they are too high then stop driving. That will lower demand and lower the cost of oil/gasoline.

Get educated.

[Jeff8462]

poor, poor oil companies... next they will get a bailout! if were serious on our dependence on big Earl.. then this would be the time to create new industries to help our economy, but as I suspect, nothing will really change cause were afraid to offend a shiek or two.. Greedy down economic's is alive and well.

[KathleenA]

One of the issues that is rarely addressed is how much of our current financial crises is attributable to the reduction in disposable income due to the increase in gas prices. As the decrease in both consumer spending and consumer confidence is tied to the increase in gas prices, the harm done to our economy due to these profits is unconscionable.
This is the time to impose a windfall profit tax on these companies.

[TxAggie]

What windfall profit? a Define that please? Have you not been paying attention to the price of crude and natural gas, not to mention the rig count?

[VikingQuest]

Let me know when they get a bailout, then I'll care.

They sell a product I want and need that benefits me . . . more than I can say for Government social programs.

Is there any talk that Government makes 4 times the amount of profit per gallon then "big oil"?

[mmz]

Wow--so true. Plus, didn't Exxon get out of paying the victims of the Valdez environmental dissaster and the livelihood of the impacted locals? Wasn't the award an incomprehensible joke?

[dessertsfirst]

Absolutely true!
The last Supreme court ruling was for Exxon to pay $500 million paltry dollars to be distributed among the 30,000 folks impacted by the oil spill, but... Exxon has appealed the amount once again... Now lets see... who makes up the Supreme Court?????

[SCG]

Maybe we should send the oil industry an apology for collapsing into depression?

[Donkihoti]

Nationalize the oil companies-energy is too important to our society to let these fatcats steal from us so blatantly!!
Any non-renewable resource should be held for the common good, not left to thieves and rascals to hold an economic gun to all our heads with!

[TxAggie]

And just how would that work? WOuld you confiscate the property of the oil companies, not to mention the private ownership of minerals? Who would explore for oil and gas, the post office?

[TxAggie]

Still waiting for a description of your well thought out strategy to "nationalize' the ol industry.....