Skip to content

Exxon Mobil Profits Soar to $11 billion for the Quarter

May 2, 2011

Last week, Exxon Mobil reported quarterly earnings of $11 billion.  As a side note, many headline left out the word “quarterly.”

We are a capitalistic society, so the ultimate role of any corporation is to boost sales, improve profit margins and make money for shareholders. For this, Exxon Mobil must be applauded. But there is one unnerving point with this report.

Against a backdrop of $4.00 petroleum prices across the country, Exxon reported:
• “….. net income of $10.65 billion in the first quarter was its highest since it made $14.83 billion in the third quarter of 2008 …..”
• “….. it had no control over high oil prices.”
• “….. it doesn’t even make that much money selling gasoline.”

Flashback to 2008, and again with a backdrop of $4.00 petroleum prices across the country, Exxon reported:
• “….. net income of $14.83 billion and sets a national record for quarterly profit.”
• “….. earnings were buoyed by oil prices, which reached record highs in the quarter …..”
• “…..  the fourth quarter (is not expected) to be nearly as good as the third because of lower oil prices ….. “

Taking this one step further, in 2006, Exxon reported:
• “….. $36.1 billion in profits, highest in U.S. history.”
• “On the strength of energy prices that hit all-time highs last year, Exxon Mobil earned $36.1 billion …..”
• “….. Exxon and other oil companies have benefited from unusually high market prices for crude oil, gasoline and natural gas — the result of tight supplies and high demand.”

For some reason, Exxon’s rationale of high oil prices contributing to the record profits in 2008 and 2006 no longer applies for 2011. The 2011 report includes a litany of financial mumbo jumbo to defuse the issue of record earnings and surging gas prices.

It’s obvious someone in Exxon Mobil thinks the average American is stupid. If not, then someone in the Ivory tower is insulting our intelligence.

Advertisements
12 Comments leave one →
  1. May 2, 2011 9:39 PM

    Exxon Mobil gross sales were $114 billion. Yes as all good progressives like to say look at the net profit. WOW that is a lot. You sound the same as Hillary Clinton all the other progressives that never look at the whole picture.
    $114 billion in sales with $10.50 billion net profit is only about 9% net profit. Gee that looks much different now. In their statement they intend to spend $34 billion next year on capital improvements. You did not mention that either.
    How many people work for this company that support families and pay taxes ETC ETC? How many other products does this company buy that employees more people?

    And since you have federal government that changes the rules at the drop of hat NO COMPANY knows from one day to the next where they can or can’t drill.
    I know that you are involved in energy. If some government agency wants to take money from companies it should be the drug companies.
    They made obscene profits and many of their products kill people every year.
    By the way Shell headquartered in the Netherlands made a huge profit too. And their money goes over seas. Why don’t you report that?
    You last condescending statement and this hatch job of an article show that you are not very smart either. Or are you just deceiving like the bureaucrats in Washington that think they live in ivory towers. They would not know what to do with a real job.
    But like all good progressives you can lead a lot of the people because they do not look at the full facts.
    Please remove me from your list.
    I do not want to hear from you ever again.
    Thank you,
    Terry Riney
    A proud capitalist and free market advocate.

  2. David T permalink
    May 2, 2011 11:10 PM

    Hi Barry

    Hooray for Exxon. Great example of a lot of people doing good in business and being rewarded for it. Heck I know my mutual fund manager is happy. Just as should millions of Americans whose investments own a piece of Exxon. Lets all remember its not a small group of tycoons who own Exxon but millions of Americans and last I checked their stock is still for sale so come on in the profits are great. That sounds a lot better than oh heck we have to bail out this company, want to buy some stock. Heck this is the sort of company America should invest IN not invest out of. Over 80% of Exxon is in foreign operations. So the talk about cutting out credits for big oil is not really going to be impact them like it will American companies like Chesapeake, Apache, Southwestern Energy and hundreds of the independents who are drilling here at home and producing American Energy.

  3. May 3, 2011 8:17 AM

    Bary, as already mentioned on your LinkeIn group:
    This is by far one of the best post I saw from you.
    At least until today…
    Keepoin telling us things like this.
    Concerned citizens (are they around?) should know stuff like this.
    Thank you very much for your valuable work here and otherwise!

  4. May 3, 2011 8:26 AM

    Barry, as already mentioned on your LinkeIn group:
    This is by far one of the best post I saw from you.
    At least until today…
    Keep on telling us things like this.
    Concerned citizens (are they around?) should know stuff like this.
    Thank you very much for your valuable work here and otherwise!

    There were some typing errors in the first posting, please eliminate.
    We can only hope, thet the two commenters, David and Terry have no kids or grandchildren, otherwise they may have spoken differently.

    At this time those who follow the line: Bigger, faster, heavier and who are also only looking for more (of the same), are actually not the winners, but the loosers.

    The arguments like bigger, faster and so on, are from another century.
    Now we have to set us and our followers differnt targets, like: smaller, lighter, slower
    and also like more clever.

    We should all safe our resources, (like crude oil, to state just one example) as they belong to the nature and to our next generations.
    There is much more to come, in this respect. Thank you all, for taking up the lead!

  5. Paul R Lake Wallenpaupack permalink
    May 4, 2011 7:44 AM

    Barry – I would have left this comment on the Rewable Energy page, but the comments have been spammed, it seems.
    Anyhow, further evidence of your argument is this article by Ron White:

    http://www.latimes.com/business/la-fi-oil-refineries-20110429,0,7502154.story
    “Oil companies are making more money and less fuel
    Refiners including Exxon Mobil are raking in profits while producing less gasoline and diesel in the U.S. than usual for this time of year. They’re also exporting more to foreign countries. With oil prices rising, that makes for sticker shock at the pump.”

    I think this really needs to be analyzed by someone like you, and the word spread about the failure of “supply and demand” with these oil companies.
    thanks for the great work
    Paul

  6. Jeff permalink
    May 4, 2011 9:43 PM

    Pray tell Barry, why are gasoline prices rising?

    You’re the business development expert. You should be able to help us all through the cash flow statements and balance sheets and tell us what is driving profitability at ExxonMobil. Are you saying profits are directly, indirectly or not at all driven by crude oil pricing? I can’t tell which part is sarcastic comment and which part is educating “stupid” Americans..

    I’m having a hard time finding the correlating facts between 2006, 2008, and 2010 in the your commentary.

    So, they made a ton of money. You seem to indicate that is what they are supposed to be doing for corporate shareholders in a capitalistic society. So, the article isn’t about making money.

    The editorial seems to be about “someone in Exxon Mobil thinks the average American is stupid.” What is it about the average American that makes you think otherwise.

    Personally, I would use the word “ignorant” as opposed to “stupid”. And yes, the average American is ignorant when it comes to matters of profit, loss, risk, reality, etc. in relation to Energy.

    Educate ignorant Americans about why Alternative Energy sources will make their lives more, better, faster. Get back to “Commentary on the Technical, Sociopolitical and Economic Impact on Renewable and Sustainable Energy in America” and leave the seemingly inane comments on what Corporate America puts in a Press Release to others.

    My two cents.

  7. May 5, 2011 2:32 PM

    Jeff,

    I hear what you are saying. Just stay tuned.

    Barry

  8. hmcgowen permalink
    May 7, 2011 10:21 AM

    Barry,

    I must say that I am a disappointed. I had come to expect you to be one of the few logical and balanced commentators on energy matters. This piece seems to be nothing more than a progressive rant about “profits”. Moreover, it would seem that anyone interested in alternative energy and conservation should be thrilled that gasoline prices are going up. High gasoline prices are the only thing that will spur people to change their choice of vehicles and reduce their use of gasoline!

    Why is it news that the world’s largest oil company posts increased profits when the price of their primary product, which is a global commodity, increases? Exxon is the best run major oil company in the world with great producing assets. The upstream division dominates the company’s cash flow, accounting for approximately 70% of revenue. Exxon does not control oil prices but they benefit when prices go up and they are hurt when prices go down. About 80% of the world’s oil is controlled by national oil companies; Exxon controls about 3 percent of the world’s oil. The weak dollar and unrest in the Middle East has resulted in high oil prices. In addition, Exxon has been able to find or acquire oil and gas reserves each year to replace the reserves that were produced in the previous year. This further increases their profits giving them a whopping 9% profit margin!

    “ExxonMobil continues to lead the industry in reserves replacement,” said Rex W. Tillerson, chairman and chief executive officer. “Our strategic focus on quality resource capture, a disciplined approach to investment and excellence in project execution have resulted in replacement of more than 100 percent of production for 17 consecutive years. These reserve additions will enable ExxonMobil to develop new supplies of energy to meet future demand and support economic growth and improved standards of living.”

    Perhaps you would prefer their press release to say: “Our undisciplined investment approach has resulted in us overpaying for unprofitable resources. Our poor project execution has resulted in not replacing reserves this year and we are expected to lose millions. We will be seeking a government bailout so that we do not have to lay off thousands of union workers in our refineries and elsewhere. This bailout will dramatically increase the national debt lowering the standard of living for all Americans for generations to come” How does this scenario benefit anyone?

    They have made wise investments in their core business and they were in a position to enjoy the benefits of the inevitable occurrence of high oil prices. In short, Exxon’s management is doing all the things that their shareholders are paying them to do!

  9. zero-exploitation permalink
    May 16, 2011 10:04 AM

    ExxonMobil chairman and chief executive officer, Rex W. Tillerson’s compensation for 2010:
    $28,952,558.00

    One word: GREED!

  10. May 16, 2011 10:43 AM

    greed indeed!!!

  11. May 18, 2011 8:38 PM

    Sorry to disappoint my readership. It’s just me a guy from Jersey, not a Prophet or a Poet. But first and foremost, I am an American. I will protect this country with all my might and with all my rights. People, companies and countries make mistakes. That is what makes us great. I stand by one overriding belief and that is for my children to have the opportunities to secure the Blessings of Liberty and Posterity.

    Maybe I am unjustly citing oil for what may be wrong in America. Some may not think anything is wrong, some may feel we are upon a chasm of the apocalypse, and some maybe calling fire with only a spark to go on.

    I my views a wakeup call is direly needed and long overdue. For this I invoke the words the Abraham Lincoln, which are as fitting and proper today as they were on the day he took his 2nd Oath to Office: “With malice toward none; with charity for all; with firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in; to bind up the nation’s wounds;…”

    If my words incite, then I did good. If my words divide, I achieved nothing. I ask myself to be open and objective! Possibly I said wrong and pointed in the wrong direction. That maybe so! But I look into my little granddaughter’s eyes and a feeling of concern for her future drives me on. I am archaic and ran my course. Al that is left is pen and paper. Don’t distain me for my crude attempt to tie complexities into a nice knot, please look deeper to see what drove that pen.

    I am sure this makes little or no sense to many and possibly to me.

  12. May 19, 2011 12:02 AM

    Barry, there is only one way out of this all: Power to a people! What we need is a clear statement towards the implementation of renewable energies of all kinds. But they have to be enmployed locally, as truly genuine, decentralized, dedicated and small-scale energy systems.

    With this, I mean that the energy is only to be converted where and when it is actually needed. Not even a single (old or new) nuclear, coal or gas power plant would be needed
    to supply the energy actually required globally. But all this is achievable only if the
    sources are used “by their nature…”, depending on local existing renewable sources
    of energy.

    They have to be used locally within a maximum radius of 15 kilometers. Requiring only small storage capacity, these autonomous units can therefore also be utilized to cover all transportation services in the world, too. Actually, we do not even need any oil companies.

    The necessary facilities should in each case be used and operated locally and above all, they have be owned by the consumers. This changes the consumer behavior in households, SME`s, industry and transport automatically in the right direction. The savings will be based on the close relationship of converting and using power independently.

    A great challenge, but an even greater opportunty.
    Thank you guys for taking up the lead here!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: