Woohoo!!! They did it, Exxon Mobile reported the biggest quarterly profit in U.S. corporate history today!!! I knew they could get there!!! Woohoo!!!
http://biz.yahoo.com/ap/080731/earns_oil.html





Woohoo!!! They did it, Exxon Mobile reported the biggest quarterly profit in U.S. corporate history today!!! I knew they could get there!!! Woohoo!!!
http://biz.yahoo.com/ap/080731/earns_oil.html




hmmm, not sure if you mean it in a lib way, so....
Record oil prices, record gas prices, record demand, record profits.
And for all the profits, they only had an 8.xx profit margin. MicroSoft had a 28% profit margin. Why no calls for excessive 'software' tax?





we've discussed this matter many times before. While the oil companies profits in US dollar terms have set records, their percentage of after tax profit margin remains in the < 10% range. As Glambman points out, the declining US dollar exchange rate, the resulting increase in crude oil and gasoline prices etc. are primarily responsible for this 'record' being set.
In contrast, Microsoft, Intel, Solar energy companies, Corn farmers etc. i.e. businesses who are protected and subsidized by the US gov't, typically enjoy 20%+ after tax profit margins. Of course this fact doesn't get much domestic mainstream press coverage. Nor does the fact that the 8% profit accrued to the oil company was funded by private sector sales, whereas the profits of the other companies are partially the result of lost / back-credited US tax revenues ( which requires higher tax rates on other businesses and individuals to compensate for).
I don't have to buy Microsoft. I can get competing systems, and they don't price to match Microsoft and Microsoft's profits.
I might make 50% profit on my business. But my business is discretionary for people to use and doesn't provide a foundation for the infrastructure of the country.
Everett Dirksen said, "You take a billion here, you take a billion there, and pretty soon it adds up to real money." At any percent.




I'm thinking that Kroger isn't trying to match prices with Wal-Mart and Costco. At least, it doesn't appear that way when I shop. And if they did, I'd favor looking at them suspiciously, too. (I thought Kroger's and Wal-Mart's profit margins were in the 2% range.)
Lots of gymnastics to say that hundreds of billions of dollars of profits isn't really that remarkable.





What that article failed to mention was that they paid taxes equal to three times their profit, so somewhere in the $35 billion range. I don't hear the libs talking about that at all, just about how "un-American" it is to turn a profit.
"never trust a big butt and a smile"-- Bell Biv DeVoe
If you're in your twenties and aren't a liberal, you have no heart. If you're in you're forties and aren't a conservative, you have no brain - Winston Churchill
It's never un-American to simply turn a profit. It's not even un-American to give your fans loaded statements to foist on the public.
Predatory tactics, antitrust activity, virtual monopolies, economic coercion - those aren't necessarily un-American, either, but they can be wrong.




Lots more than 2%.
Whenever I drive, I see prices that are not always exact. There is a fluctuation on gas prices (even if a nickel). When I get gas, if I want a 2-liter of coke, some will charge me 1.59, some 1.69, or I can get it for a buck if I buy 3 from my normal fuel stop.
For foodstuff, they are going to charge within a certain parameter. Quantity of purchase by the store can allow them to charge less. Location can also affect price, as well as 'shoplifting' rate. I can show you a grocery store here that is not in a high value real estate area that charges more for products because 'more people' steal from them.
I think we're both saying the same thing. Groceries are not colluding over prices. Glad we got that worked out.





Well you don't have to buy gasoline from Exxon Mobil either ... you can buy from Hugo Chavez' CITGO chain and help a socialist economy in south America at the same time instead of helping the US retirees who own Exxon Mobil stock ! However, Hugo Chavez only sells his oil in America at a discount if a (Democratic to the core) Kennedy brokers the deal !I don't have to buy Microsoft. I can get competing systems, and they don't price to match Microsoft and Microsoft's profits.
What that article failed to mention was that they paid taxes equal to three times their profit, so somewhere in the $35 billion range. I don't hear the libs talking about that at all, just about how "un-American" it is to turn a profit.
As usual, a picture is worth 1000 words. Almost 75% of Exxon Mobil's gross profits already went to the US gov't in the form of taxes ... $30 billion worth as opposed to Exxon Mobil's 10.6 billion dollar net profit !
In contrast the US government allows Microsoft to 'claim' that their US developed software is actually a product of Ireland ... which only levees a 12.5% tax as opposed to the 35%+ tax which would apply if that software was considered to be a US product !
(snip)"Last November, The Wall Street Journal wrote that "a law firm's office on a quiet downtown street [in Dublin, Ireland ] houses an obscure subsidiary of Microsoft Corp. that helps the computer giant shave at least $500 million from its annual tax bill. The four-year-old subsidiary, Round Island One Ltd., has a thin roster of employees but controls more than $16 billion in Microsoft assets. Virtually unknown in Ireland, on paper it has quickly become one of the country's biggest companies, with gross profits of nearly $9 billion in 2004." (snip)
(snip)"Microsoft's effective global tax rate fell to 26 percent in its last fiscal year from 33 percent the year before. Nearly half of the drop was attributed to "foreign earnings taxed at lower rates," Microsoft said in a Securities and Exchange Commission August filing. Microsoft leaves much of its profit in Ireland, including $4.1 billion in cash, avoiding U.S. corporate income taxes. But it still can count this profit in its earnings."(snip)
- so, on a dollar for dollar basis, Microsoft has 3 times the profit margin of Exxon Mobil, and Microsoft pays 1/3 as much in terms of effective tax rate !
~
Last edited by Melonie; 08-01-2008 at 03:17 PM.




Yes, the numbers do look big. But I cannot support the cry that they are making too much money and those profits should be confiscated. I mean, at some point the government might decide that the measly $100,000 profit I make during a very good year (it's been quite a while...I barely break even anymore) is "too much".
Clearly, there are folks around who believe all corporate profits are obscene..it's just that some profits are more obscene than others and who flys above or below the media radar.
FBR
Once again I have embraced my addiction and have put off the moral dilemma to another day.




Oh, I don't mind companies making profits.
I mind people dismissing a couple hundred billion dollars of profits by saying, "It's not so much, percentage-wise." It really is so much.
I mind price-setting among competitors. It defeats the very purpose of competition.





Something about record profits at a time when the economy is struggling and gas prices are at record highs just doesn't smell right to me, it's just doesn't pass the smell test. While I wouldn't be in favor of windfall taxes on their profits I do think it's time to re-examine some of the tax breaks that the oil industry is receiving.





It's not just Exxon Mobile either BTW, it's BIG OIL period.
http://biz.yahoo.com/ap/080801/earns_oil.html





well then the people that you really need to talk to is OPEC ... Hugo Chavez and the Arab Oil Shieks who actually OWN the crude oil in the ground and who decide how much will be pumped out - thus how much the selling price will be in terms of a basket of global currencies. You also need to talk to the US gov't, who OWNS the as yet unpumped crude oil off America's coasts, in Alaska etc.I mind price-setting among competitors. It defeats the very purpose of competition
Blaming Exxon Mobil for high gasoline prices is like blaming Krogers for high corn prices.




I wonder what kind of "profits" some middlemen & speculators have been making? Kinda like staring at store price sign, & ranting about it while someone else quietly lifts 1 of your Jacksons from your pocket.
I haven't blamed anyone. I'm saying collusion among competitors is bad. I'm a bit surprised that that would even be argued against.
Krogers doesn't own the farms.
I don't think the global supply and cost is as simple as Chavez and the Sheiks setting production. But to the extent that the U.S. is able to oversee that dynamic, sure, let's do that.
The US government has issued tens of thousands of oil and gas leases on previously untapped federal lands.





That was exactly my point ! Just like Kroger doesn't own the corn farms, Exxon Mobil doesn't own the oil deposits either ... they're owned by Hugo Chavez, Saudi Oil Shieks, the terrorist supporting Nigerian gov't, Vladimir Putin, and in a few cases US federal and state gov'ts etc. I'm not supporting a position that collusion among supposed 'competitors' is good ... only pointing out that OPEC by definition is collusion on a grand scale. The US gov't has no direct authority to make OPEC do anything ... as GWB's recent meetings with major OPEC country leaders clearly illustrated.Krogers doesn't own the farms.
But the fact remains that Exxon Mobil is not an oil source in and of itself who is able to affect the available supply of crude oil, and US federal and state gov'ts (which ARE oil sources or potential oil sources and are thus potentially able to affect the available supply of crude oil) have for many years allowed their oil production to decline while US and worldwide demand has increased greatly. Thus OPEC is in the position to control the amount of oil they are willing to pump versus worldwide demand ... i.e. collusion to control total available supply, and thus set the worldwide market price of oil. Oil Companies actually involve only a small fraction of total costs ...
from
I'm glad that you raised this point ...The US government has issued tens of thousands of oil and gas leases on previously untapped federal lands.
(snip)"The following is information from the American Petroleum Institute that refutes the Democratic talking points that the oil companies have 68 million leased acres to drill on and that they should drill on these leases first. Update July 31, 2008: 400 companies and not only big oil hold and pay for these leases on shore and 121 companies hold and pay for the leases off shore and again it is not only big oil. Most of these companies are only in the business of exploration, discovery, drilling, and pumping. Their only business is to drill, thus to be accused of intentionally NOT drilling is ludicrous.
Here are questions and answers to why drilling takes place or not on the 68 million acres. The API makes a lot more sense then these reckless individuals who will spout just about anything to prevent drilling.
The facts about non-producing federal leases:
CLAIM: Oil and natural gas companies are given leases by the government and purposely don’t produce from them to increase prices.
FACT: Companies pay billions of dollars for the right to explore on federal lands. If the company does not produce within the lease term, it must give the lease back to the government, and the company does not recover the billions of dollars it may have invested.
CLAIM: Companies let many of their leases sit idle and don’t produce them
FACT: Companies actively develop their leases – but not every lease contains oil or natural gas in commercial quantities. In many cases, the so-called “idle leases” are not idle at all; they are under geologic evaluation or in development and could be an important source of domestic supply. However, this does not mean all leases have the potential to produce. Companies can evaluate leases for several years only to determine that they do not contain oil or natural gas in commercial quantities. The road to bring the oil and natural gas to market — obtaining the lease, evaluation, exploration and production — is a long and complicated one.
CLAIM: If the lease doesn’t contain oil or natural gas, then the company shouldn’t have bought it.
FACT: There are tremendous risks and challenges involved in finding and producing oil and natural gas. There is no guarantee that a lease will even contain hydrocarbons. It is not unusual for a company to spend in excess of $100 million only to drill a dry hole. A company usually has only has limited knowledge of resource potential when it buys a lease. Only after the lease is acquired, will the company be in the position to evaluate it, usually with a very costly seismic survey followed by an exploration well.
CLAIM: There’s absolutely no reason for a company not to produce if it finds oil or gas on the lease.
FACT: If the company finds resources in commercial quantities, it will produce the lease. But there can sometimes be delays – often as long as seven to 10 years – for environmental and engineering studies, to acquire permits, install production facilities (or platforms for offshore leases) and build the necessary infrastructure to bring the resources to market. Litigation, landowner disputes and regulatory hurdles can also delay the process.
CLAIM: The vast majority of federal and gas resources are already available for development.
FACT: In the Lower 48 states, about 85 percent of the Outer Continental Shelf and 67 percent of onshore federal lands are off-limits or facing significant restrictions to development. There is no way, at this stage, to determine exactly the extent of the resources off-limits because many of these areas have not been subject to inventory studies in decades.
CLAIM: Non-producing leases could provide a major source of new supplies.
FACT: Many of these leases will provide a major source of new domestic supply once they are developed. Companies are actively developing the leases, and in addition to paying for the lease, they must also pay rent to the government while they conduct development and exploration efforts. But this process takes time. Reducing the time companies have to develop a lease or increasing the costs imposed by government will not increase supply for American consumers. Nor will denying access to areas of oil and natural gas potential like the Atlantic and Pacific OCS."(snip)
from
~
Last edited by Melonie; 08-02-2008 at 09:04 AM.
I guess I should've been more clear. Kroger doesn't farm the farms. They don't box the cereal. They don't make the shampoo. They don't slice up the animals. Etc.
I'm not sure why we're blowing all this smoke anyway. I grant you that Kroger may have a good profit margin, although I'm not sophisticated enough, nor do I want education from a biased source, to know how 23% of gross profit translates to 2% of pretax profit, and which is more relevant in how that translates to comparison with oil companies and their profit. It's a red herring. I still do not see Kroger and Wal-Mart (which also has pretax profits in the 2% range) arranging their grocery prices anywhere close to how I see on gas stations as I drive down the road and across the country.
If I had seen a dramatic escalation in Kroger's food prices (which I am, thanks to fuel costs) with corresponding news that Kroger profits had jumped up to $40 billion and their CEO was making a few billion a year, then I would probably not like Kroger and would take my grocery business elsewhere. Except that if they ran like the oil companies, I needn't bother. They'd all be apparently running the same.
Of all those claims referenced on the advocacy site, I didn't make any of them, in case that's not clear. The claim was made here that domestic land wasn't being opened up to the oil companies. My response was that tens of thousands of leases had been opened up. I don't see where my response was refuted.





well, I can't dispute that the Petroleum Institute isn't a biased source. But that doesn't mean that the points they raise about gov't oil leases aren't valid. Yes there may be 1000 leased properties that have not been developed to the point of commercial oil production, but how many of those 1000 ...The claim was made here that domestic land wasn't being opened up to the oil companies. My response was that tens of thousands of leases had been opened up. I don't see where my response was refuted.
- haven't yet been fully researched to determine if and where oil deposits exist
- after being researched and explored, didn't appear have enough oil deposits to make the investment in well drilling economically feasible
- did have enough oil deposits to make the investment in well drilling economically feasible, but were stopped due to lack of state / local permits
- did have enough oil, were able to get permits, but were stopped due to environmental lawsuits
- did have enough oil, were able to get permits, were not stopped by environmental lawsuits, but had insufficient time remaining on the lease agreement to drill wells and achieve production before the land reverted back to the gov't
Obviously I don't know these answers. However I tend to go with Occam's Razor on this one ... which tells me that if an Oil company spent millions or billions to purchase a lease, and the exploration / testing indicated a reasonable likelihood of commercial development, and there weren't huge potential problems with state / local permits or environmental lawsuits, that the Oil company would NOT deliberately 'sit on their hands' until the lease expires ! Like every other company they want to earn a profit. But like every other company they don't want to 'throw good money after bad'.




True enough, but, when the product you sell is mainly a need, and you can control the supply and the demand is going up.....you can control pricing, by influencing the supply. Just as the demand has gone down recently.....so has the price.....I'll bet dollars to donuts that in the next few months supply of oil will also go down......to keep the price up...
Bookmarks