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Exxon breaks US profit record

Posted Oct 30 2008, 11:45 AM by Kim Peterson
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Unbelievable. Exxon Mobil just reported the biggest profit ever for a U.S. company. It raked in a billion dollars a week in pure profit in the July-September period, 58% more than a year ago.

I don't know whether to admire the accomplishment or hurl.

Crude prices hit an all-time high during the quarter, which helped boost Exxon's profit even though its production actually fell 8% from last year. With that kind of demand, Exxon execs are shrugging off the economic storm felling other companies right now.

"Despite recent volatility in the financial, commodity and credit markets, the fundamentals of Exxon Mobil's business remain strong," executive David Rosenthal said on a call with analysts.

I'll say. The company is printing money, holding the record for the top 10 most-profitable quarters in U.S. corporate history (and the largest annual profit.) Exxon shares are down nearly 3% today after the earnings report to $72.69.

Still, Exxon's next quarter probably won't be so rosy. Crude prices have plunged from all-time highs to around $65 a barrel. Demand for fuel has slowed way down. And production levels for Exxon continue to drop, while the company spends tens of millions of dollars a day to drill wells and build plants.

The party might be over, even for Exxon.

Update: Hoo, boy! Some commenters are up in arms because I didn't mention the taxes Exxon paid during the quarter. Keep in mind that taxes paid aren't generally written about in earnings coverage, mainly because investors don't really care, especially compared with other line items in an earnings release.

But, because you asked for it, here it is. Exxon paid $11.3 billion in income taxes in the quarter, bringing total taxes paid for the first nine months of the year to $31.2 billion. It's a staggering number, just like all the other numbers in the quarterly report. Exxon's income tax rate has increased to 48% from 45%.

Related reading:

Exxon: The world's 18th-largest economy?

Korea's intense hunt for oil fuels price hikes

Where to put money: The 'super safe' stocks

Oil now lost 23% from July peak

Comments

 

wow, we have a bunch of idiots on here.  As an employee of an oil and gas company, some of you might not realize that our industry on average takes in about 9% of profits after taxes and costs. NINE percent.  Is that "windfall"? no.  look at high tech companies who pull in 30-40% profit, yet you don't hear about them.  

WHy don't you all look at it this way....say you bought a house for $75,000 and you live in for a year or two and the market goes through the roof and now your house is worth $200,000.  What do you sell it for?  Do you sell it for $200,000 like the market says it's worth or do you sell it for $100,000?  I mean, heck you still made money, right?  you made $25,000.  Why sell it to where you make $125,000?  oh yeah, that's right..the MARKET sets the price.  NOT OIL COMPANIES.  SUPPLY AND DEMAND, OPEC, INFLATION.  

Geez, wake up people.  exxon and every other oil and gas company pay more in taxes then they do in earnings.  If you are to tax these companies further, jobs will be cut, exploration will be cut (causing higher prices at the pump), their income will be cut (causing less revenue to pay taxes on), etc, etc.

since when was capitalism a bad thing?

Paradigm..... why should Exxon invest in alternative energy.... they are an OIL COMPANY....hello....

I am going to vote for Obama too (even though I am a registered Republican) but there is a catch: Obama wants to tax the big companies but there is a problem with that.  All of these companies are use to making a certain amount of money.  Where do you think that the company will get the money to pay the tax?  From us.  I don't have a good solution but don't be surprised if Obama wins, oil drops more, and gas prices are actually higher than they are now.  Also, the definition of profit is what is made after the bills are paid.  So yes, as someone else prior to me said: "**** Them!!!".  I think that all of the people posting percentages of what is made on gas needs to check their facts; the people making the money is not the individual gas stations, it is the company they get the gas from.  Gas station owners only make a few percent per gallon, but not the oil companies.  They make more.

The comments under this article and the article itself are a statement to the economic idiocy of most of the American Public. If you do not understand basics economics you think these profits are out of line and that makes you an idiot. Most of you need to read a remedial economics text book, that is assuming most of you can read.

It would be nice to know how much Exxon-Mobil paid in taxes and charitable contributions during this same period.  The same people who whine about the money Exxon is making are the people who are demanding more fuel.  I don't begrudge success - they made $15b on $137b in sales - that about 11% - not totally outrageous.  

If you're feeling left out, just drop them a line and ask for a cut.  I'm sure they'll accommodate you!!!   Happy Halloween!!!

I understand a business is in business to make profit, however the billions of dollars of profit Exxon is raking in is just that, PROFIT. This is not money required for payroll, benefits, operational cost or anything else, it is PROFIT above and beyond. It is incredible the amount of taxes that they pay, truly unbelievable. Considering how much they earn annually, I personally do not feel bad. I have been spending $600-$800 per month in fuel cost going back and forth to work during the period that they were making billions. The cost of everything has went up. I am working huge amounts of overtime just to make ends meet. There are many reasons are economy is in trouble, but oil companies like Exxon and there repeated record quarterly profits are not helping.

We need strong oil companies in the USA.  Otherwise, no gas and we all walk to work and chop trees down to heat our houses.  If all USA companies made this kind of money, we tell China and Europe to go to hell

i will never buy anything at a mobile exon gas station or any of my family, my company has switched over to chevron and we use 10,000 gals of diesel fuel a week, plus the oils and greases, the oil company should sink into the worlds largest sink hole and never be found

This is exactly why our economy is in the toilet.  Huge corps like that are crying that they are not making enough money posting record profits and I am sure if you look to see how much the execs are making, it will be in the millions.  But it is never enough to satisfy them.  They will keep raising prices and we are the ones who will pay the bill.

People just don't understand that the reason Exxon's profit is so high is because of their drilling operations, not their gas sales. They don't get to set the price of a barrel of oil -- OPEC and the market does. When oil skyrockets, so does their profit.

Sure, they could use some profit to reduce consumer gas and oil prices, but that might be seen as "dumping" gas at below-market prices, forcing other oil companies out of business.

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