Exxon's whopper earnings

[liberal N proud]

But while drivers may think the No. 1 oil company is exploiting their pain, Wall Street is actually a little disappointed.
:wtf:
8.4 BILLION and Wall Street is disappointed?

NEW YORK (CNNMoney.com) - A whopping $8.4 billion? Or only $8.4 billion?

Exxon Mobil's first-quarter profit was nearly a billion dollars more than the same quarter a year earlier. Not as much as Wall Street wanted, but still an awful lot of money - especially to people paying $3 a gallon or more to fill their gas tanks. They're wondering why oil companies don't feel their pain.
Whether or not it's any consolation, feeling a little pain Wednesday were Exxon Mobil (Research) shareholders, who saw their stock fall as much as 3.3 percent in morning trading because the $1.37 income per share was a dime below analysts' forecasts.

Fadel Gheit, an energy analyst at Oppenheimer, attributed the fall in profit from the $10.7 billion - a record for any U.S. company - posted in the fourth quarter of 2005 to higher production costs, higher taxes and royalties, and a 41 percent boost in capital investment and exploration projects.

Gheit noted that the company is now producing at its highest level in five years.

"They have to go on the offensive to withstand this avalanche of criticism," he said.

The decline in quarter-to-quarter profit came despite a 14 percent increase in oil prices since the start of the year.

Record gas prices, and oil company profits, have sparked public outrage and talk of action by lawmakers in recent months.

There are currently bills moving through the Senate to either limit future oil company mergers or skim off some of their earnings in a "windfall profits" tax.

http://money.cnn.com/2006/04/27/news/companies/exxon/index.htm?cnn=yes

[unblock]

1. "disappointment" on wall street is a highly temporal concept

if you're expecting $11B in profit, you're absolutely thrilled and run the stock way up. then, when the profits turn out to be "only" $8B, you're "disappointed" relative to the day before, but you're still thrilled in the longer view.

wall street reporting always tries to explain TODAY'S price movement, ignoring any longer trends. exxon's stock is still up nicely on the year and WAY up over the last 3 years or so.

longer term investors are thrilled. only the folks who bought YESTERDAY are pissed.

[havocmom]

2. Have they paid for the beach cleanup? Or are they still too poor?

Those are questions America should be pondering. With all the profits, oil companies are too poor to take responsibility for cleaning up the messes they make? We are suppose to hock our possessions to buy the gas to get to work this week AND we have to pay the clean up bills for their negligence too?

Wow, I gots ta git me a business license so I can rob my neighbors while destroying the neighborhood in my quest for profits!

[One_Life_To_Give]

3. Depends on Capital Employed

If Exxon has $1 Trillion employed and the return is $8 Billion per quarter. Thats a impressive 32% per year return. But if their total capital employed is $10 Trillion. They would be better off liquidating the company and buying US Treasury Bonds.

[libertarianPA]

4. Oil Company Profits and The Senator From Windfall

Of all the politicians complaining about the profits and practices of America's wicked oil companies, few can top Sen. Maria Cantwell (D-Wash.).


Among her latest ventures is a demand that the oil company executives who testified Nov. 9 be brought back to the Senate, this time under oath. In a letter to the chairmen of the two committees that held the hearings, she claimed that the CEOs "failed to answer the simple questions asked of them. This is unacceptable. If we're going to get to the bottom of high gas prices, we need complete answers that Americans can trust."


Of course, "getting to the bottom" of price rises isn't difficult. Energy exists in a global commodity market. Demand is rising from China and India, as economic growth brings a better life to more than two billion people, and supply has been constrained by OPEC, Hurricanes Katrina and Rita and absurd policies that restrict domestic drilling and the construction and expansion of pipelines and other energy infrastructure.


Cantwell has opposed such supply-boosting policies in the United States, lately blocking measures that would have benefited her own state while increasing tanker traffic in Puget Sound.

more... http://www.capmag.com/article.asp?id=4493

[libertarianPA]

5. Oily politicians

If there is anything worse than partisan demagoguery, it is bipartisan demagoguery. Republican leaders have now joined the Democrats in blaming the oil companies for the fact that prices rise when demand expands more than supply.

Prices have been rising under these conditions for thousands of years, long before there were any oil companies. This has happened with everything from food to furs and it has happened among people in every part of the world.

What has also happened in recent times has been that higher gasoline prices bring outraged charges of "gouging" by Big Oil. Some of the most emotionally powerful political words and phrases are wholly undefined -- "exploitation," "greed," "social justice" and the perennial favorite, "gouging."

more... http://www.townhall.com/opinion/columns/thomassowell/2006/04/27/195275.html