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Exxon posts record $11.68 billion profit

Discussion in 'Political Zone' started by Jordan55, Jul 31, 2008.

  1. Jordan55

    Jordan55 Active Member

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    Read the article and you will have to laugh when you read the dems want to tax these guys more, just do the math, just slightly higher then an eight percent profit margin and taxed right at 32 billion dollars through out the world. Who do you think will have to pay for those proposed higher taxes it sure as hell won't be the oil companies.:banghead:



    NEW YORK (CNNMoney.com) -- Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter.

    That profit works out to $1,485.55 a second.

    That barely beat the previous corporate record of $11.66 billion, also set by Exxon in the fourth quarter of 2007.

    "The fundamentals of our business remain strong," Henry Hubble, Exxon's vice president of investor relations, said on a conference call. "We continue to capture the benefit of strong industry conditions."

    But Exxon (XOM, Fortune 500) profit fell short of Wall Street estimates.

    Analysts predicted the company, the world's largest publicly traded oil firm, would make $12.1 billion in profit on $144.4 billion in revenue, according to Thomson Reuters.

    Exxon shares fell about 3% on the New York Stock Exchange.

    Excluding money set aside for a recent damage award related to the Valdez tanker spill back in 1989, Exxon made $11.97 billion in the quarter.

    Pricey oil cuts both ways
    Exxon was both helped and hurt by high oil prices.

    As an oil producer, the company makes a lot of money when crude prices rise. Exxon made $10 billion from selling oil in the latest quarter, up nearly 70%.

    But as a refiner, it must also buy crude oil to turn into gasoline. Exxon actually buys more crude than it sells.

    Profits from its refining business totaled $1.6 billion in the quarter, less than half of what they were last year.

    "Record crude oil and natural gas realizations were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs," read a statement attributed to Rex Tillerson, Exxon's chief executive.

    While oil prices in the quarter were nearly twice as high as the same time last year, gasoline prices only rose about 30%.

    That's one reason why the stock of major oil companies - such as Exxon, Chevron (CVX, Fortune 500), Royal Dutch Shell (RDSA) and BP (BP) - that both produce and refine crude has been relatively flat over the last year, despite the runup in oil prices.

    Meanwhile, shares of companies that mostly produce oil, like Anadarko and Apache, have soared in the last year, while shares in refiners like Valero and Sunoco have tumbled.

    Where the money goes
    Exxon spent $7 billion in the second quarter finding and producing more new oil, up 38% from last year. Still, oil and natural gas production from the company fell 8%. Even excluding special events such as a labor strike in Nigeria and seizure of fields in Venezuela, production slipped 3%.

    The production declines shouldn't be seen as an indicator the world is running out of oil, said Fadel Gheit, a senior energy analyst at Oppenheimer.

    Rather, as the price of oil rises, the amount of oil Exxon or any international oil firm is allowed to pump from many oil-rich countries decreases, said Gheit.

    "We didn't expect production to be down as much as reported," he said. "But that doesn't mean [worldwide] production is down, just that Exxon's share is decreasing."

    The company returned $10.1 billion to shareholders in the form of dividends and stock buybacks, 12% more than last year.

    On an earnings-per-share basis, Exxon made $2.22. That was still lower than analysts had expected, but 24% higher than last year, a gain Exxon attributed to its aggressive stock buyback plan.

    The big international oil companies have been criticized for plowing much of their profits back into stock buybacks and other programs to benefit shareholders, as opposed to exploring for more oil which could bring down the price of crude for everyone.

    "While oil companies are earning record profits and gas prices are soaring, the largest oil companies have invested more resources in stock buybacks than U.S. production," said Congressional Democrats in a press release shortly after Exxon announced its earnings.

    Other critics charge the oil companies with deliberately restricting production in an attempt to keep prices high.

    The industry says it's investing as much as it can in finding new oil, but is having a hard time given the shortage of workers and equipment in the sector.

    Recent efforts by countries such as Russia, Venezuela and Kazakhstan to gain greater control of their own domestic oil resources have also hampered the ability of international oil companies to increase production.

    In addition to making hefty profits, Exxon also had a hefty tax bill. Worldwide, the company paid $10.5 billion in income taxes in the second quarter, $9.5 billion in sales taxes, and over $12 billion in what it called "other taxes."

    Political backlash
    With Americans paying nearly $4 a gallon for gas, oil company earnings have been political fodder of late.

    Congressional Democrats said they are having a conference later in the day to call for an end to tax breaks for big oil firms.

    Several bills have been introduced in Congress to enact a "windfall" profits tax on these earnings, or at the very least eliminate manufacturing tax exemption oil companies now enjoy. Presumptive Democratic presidential nominee Barack Obama wants to tax oil companies at a special rate every time crude goes over $80 a barrel.

    Most plans would either use this newfound tax money to fund investments in renewable energy, or give it to low income Americans struggling with high energy prices.

    But so far those efforts have been blocked - mainly by Republicans - who say raising taxes on oil companies will only discourage investments in finding new oil and raise the price of crude.

    Defenders of oil company profits also point out that their profit margin, at around 8%, is slightly below average for S&P 500 companies, and far below the 20%-plus margins seen at companies such as Microsoft or Pfizer.
  2. Cajuncowboy

    Cajuncowboy Preacher From The Black Lagoon

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    The dems never ever get it. And the blind schmucks who keep electing them, keep thinking they are the people who will save them, all the while they are ones that are stabbing them in the back.
  3. Jordan55

    Jordan55 Active Member

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    Pelosi: Bush Drilling Proposal a Hoax Unworthy of Serious Debate on Gas Prices
    Obama saying that more drilling will lead to an oil deficit. Yet, other countries are urged to drill more.
    I believe, this was covered in Economics 101, supply and demand
    But the Dems never understood the free market concept.


    Last update: 2:06 p.m. EDT July 30, 2008
    WASHINGTON, July 30, 2008 /PRNewswire-USNewswire via COMTEX/ -- Speaker Nancy Pelosi released the following statement today in response to remarks by President Bush on energy this morning at the White House:
    "The President knows, as his own Administration has stated, that the impact of any new drilling will be insignificant - promising savings of only pennies per gallon many years down the road. Americans know that thanks to the two oilmen in the White House, consumers are now paying $4 a gallon for gas. But what Americans should realize is that what the President is calling for is drilling as close as three miles off of America's pristine beaches and in other protected areas.
    "The President has failed in his economic policy, and now he wants to say, 'but for drilling in protected areas offshore, our economy would be thriving and the price of gas would be lower.' That hoax is unworthy of the serious debate we must have to relieve the pain of consumers at the pump and to promote energy independence.
    "Today, the New Direction Congress will vote on legislation to bring down gas prices by taking crucial steps to curb excessive speculation in the energy futures market. The President himself could lower prices by drawing down a small portion of our government oil stockpile, the Strategic Petroleum Reserve. The New Direction Congress will continue to bring forth responsible proposals to increase supply, reduce prices, protect consumers, and transition America to a clean, renewable energy independent future."
  4. DFWJC

    DFWJC Well-Known Member Zone Supporter

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    8% ....some just don't understand that it is not that great. The bottom line number really is gigantic. It's deceiving.

    Just remember that in the 1990s our government allowed some gigantic oil mergers to occur. Exxon-Mobil, Chevron-Texaco and many many many others. There were so many large companies competing before then but now there are only a few giant ones and thousands of very small ones.

    Anyway, I digress. Compare "big" oils numbers to some of the pharms or techs and you'll see that for the size of them they really are not doing as well as you would think.
  5. Cajuncowboy

    Cajuncowboy Preacher From The Black Lagoon

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    Nancy Pelosi is one of the biggest jerkwads to ever grace a podium. She has no more idea of what's going on as a fly has an idea that that big plastic thing heading for it will smash it.

    What an embarrassment to this country. If you want to keep fools like this in power, keep voting democrat.
  6. Jordan55

    Jordan55 Active Member

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    I concur and would like to throw in Harry Reid, in that assessment

    Never Have, Never Will
  7. trickblue

    trickblue Old Testament... Zone Supporter

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    Damn us conservatives...

    The libs have no problems with their pet organizations collecting donations by fraud. Damn to Hell those that earn theirs...

    I still want to see a justification of the federal government stripping off 25% before refining...

    Why on God's green earth should our government make more that the oil companies...
  8. Cajuncowboy

    Cajuncowboy Preacher From The Black Lagoon

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    Uh, 3X more. :banghead:

    It truly is pathetic and I agree 100%
  9. iceberg

    iceberg detoxed Zone Supporter

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    oh lord how hard must you make me work to make the obvious clear to those who can't understand?

    both sides pray for the simple things. we just have some desire to go complex it up after that.
  10. Doomsday101

    Doomsday101 Well-Known Member

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    Record profit but then again it cost money to drill

    They will spend $100 to $200 million invested in a project before they know if it will even produce. If it does have promise they will spend 2 to 3 billion in cost in drilling. Yes they make a profit and a lot of that goes right back into development. You know why congress has not found price gouging after all their hearings on the topic because they can't find where any gouging is taking place.
  11. Jordan55

    Jordan55 Active Member

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    Will the Dems ever get it?

    Seriously, Obama wants a new windfall profits tax on Big Oil because of these huge profits that they announced yesterday and another $1,000 stimulus check to every American that qualifies paid for from this windfall profits tax. This is idiotic. Once again it's pure pandering and pure populism and these guys can't figure out who their villain is going to be. When oil was approaching $150 a barrel, of course the evil villains are the spectators. Now it's back to Big Oil. Even the Los Angeles Times today got it right in an editorial: Nearly 50% of those profits reported by Big Oil are taxable.

    That means federal taxation on the Big Oil profits. So whatever you read -- $11 billion, whatever the number -- half of it already goes to the federal government, and they want a windfall profits tax. There are a lot of things about this whole business of oil that a lot of people do not understand, but I just find it fascinating. Nancy Pelosi and the gang have left town. There is nothing going to be done for five weeks, not a single appropriation bill, nothing on drilling. And it was just four years ago, remember how John Kerry was hounding President Bush to go "jawbone" the Saudis and bring the oil price down? Now, four years later, all they want is for the price to remain high. They want you miserable. They want you suffering.
    Taken from the Rush Limbaugh article
  12. ZeroClub

    ZeroClub just trying to get better

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    I'm not calling them crooked. However, we all know that Exxon has some top-flight accountants and tax attorneys. The complexity of the accounting and tax laws, coupled with the size and complexity of Exxon, means that figures can be legally manipulated (e.g., timing various losses, improvements, etc.).

    If I'm in charge of an oil company, and I've got an angry mob of citizens and politicians knocking at my door, I'm going to do everything I legally can do to avoid singing "We're in the money" while releasing my numbers.

    All I'm saying is that everybody should take that 8% number with a huge grain of salt.
  13. Jordan55

    Jordan55 Active Member

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    How about the 32 billion dollars worth of taxes, that your Democratic leadership would like to add to, Do you take that with a grain of salt?
  14. ZeroClub

    ZeroClub just trying to get better

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    You'd have to ride the short bus to believe Exxon is completing the short form.
  15. yeahyeah

    yeahyeah New Member

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    Hey good on em..not their fault oil is trading at 140+ a barrel. Ofcourse their profits will be high.
    They a subject to the futures market just like everyone else. They are just responding.
  16. MetalHead

    MetalHead Benched

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    Liberalism is a mental disorder.
  17. trickblue

    trickblue Old Testament... Zone Supporter

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    She's among the most inept Speakers we've ever had...

    She's a joke...
  18. Doomsday101

    Doomsday101 Well-Known Member

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    Politicians are the ones making them out to be the bad guys. These are business and they do furnish an important need and are under many restrictions. They report about profit they do not report the cost involved in development of new wells which runs in the billions. Taxing the hell out them is not going to solve any problem we currently face.

    Last year Exxon paid over 3 Billion in taxes. Sorry Dems love to villainies any business that is making money and the fact is they continue to have hearings after hearings on price gouging and find none but even after that they continue to make accusation about the oil company without anything to back it up.
  19. Doomsday101

    Doomsday101 Well-Known Member

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    I agree. It is easy to win an argument if you do not allow debate and thus far the Dems and Pelosi refuse to even allow debate to take place let alone any vote on this issue.

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