Exxon Mobile Excess profit research

Spurred on by the recent events including; hikes at the gas pump, the announcement of record profits by major oil companies, Senator Friske’s call for an investigation, and Skeptic O’s comment about ATS lack of reporting, etc. I decided that tonight I would do a bit of light research on the issue of gross oil profits.

First I looked at the existing ATS threads on the subject. To be frank, even though there are several existing posts on the subject, there is not a lot of factual content beyond the PR news links about the 3rd quarter profit gains. So, I decided take a moment to do more detailed research.

The following list details the areas which will be focused on for this part of the post.


1. Who are the major industry leaders in the Petroleum market
2. Who is the #1 industry leader
3. What was the Net Income for this industry leader
4. How does this compare of the rest of the market leaders
5. Who is the leading companies CEO
6. What is this company saying about their income profits
7. What is their future income forecast
8. Can the sudden profits be linked to the current administration officials


Below are the Results of my 1/2 hour of research.
What the heck, this ain’t a thesis ya know.

Who are the major industry leaders in the Petroleum market

An analysis of an entire industry to determine the current leadership can be a little time consuming. Therefore your humble fellow member (me) took a bit of a shortcut. I looked it up on Yahoo Finance.

Leaders in Market Capitalization

EXXON MOBIL CP [XOM] $355.0 B
BP PLC [BP] $232.4 B
TOTAL S.A. [TOT] $154.0 B
PETROCHINA CO ADS [PTR] $132.5 B
CHEVRON CORP [CVX] $119.6 B
E N I SPA ADR [E] $100.3 B
CONOCOPHILLIPS [COP] $88.1 B
REPSOL YPF S.A. [REP] $35.9 B
INTL FUEL TECH INC [IFUE.OB] $143.4 M


Who is the #1 industry leader

I feel that the above list clearly answers this question. The current industry leader is Exxon Mobile with an astounding $355.0 Billion dollars.


What was the Net Income for this industry leader

Oops, I just answered that question. $355.0 Billion dollars.

How does this compare of the rest of the market leaders

See List of Industry leaders above. Exxon Mobile is over $100 billion ahead of its nearest competition. Not a small margin by any standard. In addition, it is the leader of any industry if evaluated by market cap.

media.washingtonpost.com..." target='_blank' class='tabOff'/>


Mod Edit: Fixed Link

[edit on 10/31/05 by FredT]

[edit on 10/31/05 by FredT]

Who is the leading company CEO

According to
Exxon’s website, Lee R. Raymond is the Chairman and Chief Executive Officer of Exxon Mobil Corporation.



Mr. Raymond was named chairman and chief executive officer of Exxon Corporation in 1993. Mr. Raymond is also listed as vice chairman of the Board of Trustees of the American Enterprise Institute.

Mr. Raymond is also listed as a Director of the following corporations:
United Negro College Fund
J.P. Morgan Chase & Co
Executive Committee and Policy Committee of the American Petroleum Institute

He is also a member of:
The National Advisory Council of the American Society for Engineering Education
The National Academy of Engineering
The Advisory Board of Project Shelter Pro-Am
The Board of the Business Council for International Understanding, Inc.
The Innovations in Medicine Leadership Council of UT Southwestern Medical Center
The University of Wisconsin Foundation
The Dallas Committee on Foreign Relations
The Dallas Citizens Council
The Business Council
The National Petroleum Council and its Committee on Natural Gas
The American Council on Germany
The Singapore-U.S. Business Council
The Emergency Committee for American Trade
The Executive Committee of the 21st Century Campaign of the American Institute of Chemical Engineers
The President's Export Council
The Secretary of Energy Advisory Board
The Council on Foreign Relations
The Trilateral Commission
The Business Roundtable (he also serves as a member of the Roundtable's Policy Committee, its Security Task Force, Taxation Task Force, and Government Relations Working Group).
He is a partner emeritus of the New York City Partnership.
He is a Trustee of the Wisconsin Alumni Research Foundation

Mr. Raymond is listed in Forbes as one of America’s most powerful men. Forbes lists his 2004 Salary and other compensation is listed as $38,076,382 and Stock options of $108,727,890 for a total of $146,804,272. It may be notable that I had to link to a cached file for this info, as Forbes regular site (at least the part with this info) suddenly went under maintenance. It was not an hour previously.

It is rumored that the chief executive of Exxon Mobil Corp. will step down at the end of the year, after a tenure marked by record profits and environmental controversy. I urge you to read the article in the www.washingtonpost.com..." target="_blank" class="postlink" rel="nofollow"> Washington Post describing his tenure, his leadership direction, and the controversy surrounding it. I assure you that an entirely separate thread could be filled by this information alone.




[edit on 31-10-2005 by makeitso]

What is this company saying about their income profits

I went directly to the Source of the largest profit maker to see what they say about their current profits. It only took a moment to find their website. Exxon Mobile’s Website It took a few more seconds to find the link for their News Release Portal.
And there it was in the very first link. The announcement that shook the U.S.

10/27/2005 - 08:56 AM
Exxon Mobil Corporation Announces Estimated Third Quarter 2005 Results

Yup, they took in a chunk of change all right. The net income for the third quarter is listed as $9.92 billion all right. So what was the previous quarter profit? A quick lookup on Yahoo took a couple more seconds. Yup, here it is. Net Income $7.64 billion. A difference of $2.28 Billion

But, to be fair, they note in the release that the Net income of $9,920 million includes a special gain of $1,620 million from the restructuring of the Corporation's interest in the Dutch gas transportation business. You can find detail of the restructuring here.

I also note that Exxon’s News Release section listed an OP/ED section, which has an article posted on the same date as the 3rd quarter earnings. It is titled ExxonMobil's Op-Ed Puts Oil Industry Earnings In Perspective. It attempts to explain that while their profits are high, they are not out of line when looked at beside other industries. They postulate that the industry standard is 7.7 cents profit per dollar of revenue. So their profit margin of 8.6 cents is not out of line. Of course they are hoping that you don’t catch on that they are trying hard to throw you a curve ball. You have to read it twice to note that they are using a deferral technique by discussing their 2nd quarter revenue, while hoping you are thinking they are talking about the 3rd quarter revenue.
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They also make a point of stating that these profits were from global scale enterprise. They attempt to persuade you that because of their large investments, that it is ok to make this kind of profit. In addition, the articles author would have you believe that it is not their fault they made so much profit, because the profit is set by the demand for the commodity.

Further information from Exxon Mobile about their large profit in the actual 3rd quarter report can be found on their SEC statement.

Third quarter results include the impacts from hurricanes Katrina and Rita, two of the most significant U.S. natural disasters in recent history. Our response has been rapid and innovative, demonstrating the resilience of the global energy marketplace. Following the hurricanes, Exxon Mobil maximized gasoline production from all of our refineries which were operating in the U.S., and increased imports from overseas affiliates to meet U.S. demand.

We acted responsibly in pricing at our company operated service stations, and we also encouraged our independent retailers and distributors to do the same.

Third quarter 2005 results were adversely impacted by the hurricanes, with U.S. production volumes down 50 thousand oil-equivalent barrels per day and additional costs of approximately $45 million before tax. Our earnings in the third quarter reflect the impact of the relatively volatile industry environment on commodity prices and industry margins.

.

I feel that it is also noteworthy that Exxon's CEO says in the 3rd quarter announcement that while the U.S. hurricanes impacted profits, other locations more than made up for oil production during this period. So it seems to me that there was no shortage of oil to produce gasoline during the 3rd quarter.



[edit on 31-10-2005 by makeitso]

What is their future income forecast

Again, I went straight to the horses mouth for the answer to this question. I had to do some looking, but If you muddle thru the actual 3rd quarter report, you may just see what I saw.

Reduced volumes and higher costs will also impact the fourth quarter.

In addition, Yahoo Finance lists Exxon’s current growth at 16.2% and its growth for the next quarter at 26.1%

Can the sudden profits be linked to the current administration officials

I will have to ask the readers to address this question. I have some real life issues to deal with for the moment. I will attempt to address this issue later.

However, if you look at the memberships and directorships that Mr. Raymond holds, I think that they could be traced at least in inference to the current administration.

Can anything on the web implicate complicity with the current administration? I doubt that kind of documentation will be easily accessible, but I have seen the ATS membership rise to the occasion before, so I don’t rule anything out.

In conclusion, I would like to say that while I have not found any damning evidence that Exxon broke any laws, nor went beyond its stated charter during the third period, indirect evidence does seem to indicate that the bulk of the 3rd quarter profits were windfall caused by high prices brought on by the hurricane in New Orleans. I myself am having a hard time deciding who is more in the wrong. Exxon for trying to do what business do, (make a profit). Or us folks in the U.S. for being so durn dependant on oil barons and their black gold.


PS
I realize that due to the late hour that this is posted, and the length of the post, that it will almost certainly escape notice.
But, Que sera sera sera.


[edit on 31-10-2005 by makeitso]

Can the sudden profits be linked to the current administration officials?

Well I’m not sure that I can answer the question with complete and satisfactory information. The evidence is entirely implicit and mostly based upon the web of relationships companies and individuals would create in the regular course of business (if it can ever be called ‘regular’). However I find Mr. Raymond’s involvement if the CFR and Trilateral commission to be telling on this issue, if only for the fact that the ideas espoused by these globalist groups often make it into the policies of any administration, the current one especially.

As to the question at hand I believe that there are some indirect ‘links’ that can be made between oil companies and the current administration.

If you read opensecrets.org's profile of Exxon

You’ll see this graph comparing total monetary contributions made to both political parties.



Compair this to the entire Oil & Gas industry



This, I know, does not show that the administration is directly responsible for the current 3rd quarter profits, but the argument can be made that the Republican Party is in a position to offer the oil companies benefits as far as policy, in return for the years of loyal and rather large contribution, and one might even say partisanship in favor of the Republicans.

Also on a side note Exxon has profited from the administration's policies in the past in May 2003 the Guardian reported on Exxons profits from the war in Iraq.

War propels Exxon profits to record $7bn

I cannot say that anything illegal is going on, and I doubt that anybody ever will, but as far as morals and ethics go (which is subjective) I believe that there is a definite sucking of wealth from the masses, and there is little dignity left in what they are doing. I don't have anymore time tonight but I'll be interested in hearing controbutions from others here on ATS.

Odd as it may seem i do not really understand where this thread is heading....
The assumption that Exxon mobil would need to break any laws, or do something illegal at all, to make this sort of profit is much like attacking the fort with ladders when it's gates are open with arrows pointing the way.

As i have shown with many links in this section of the forum oil companies in America are making a vast profit not by being clever or devious ( wich they are) but simply because they happen to be in an industry wich the US administration are manipulating to the hilt to ensure that the US economy keeps 'growing'.

Oil trade happens almost exclusively in dollars and this forces all countries to buy dollars thus servicing American deficit. The more pressure there is on the US economy the more the oil price will rise imo....

Great links and fine research effort btw.

Stellar

legality is such a pathetic concept these days.

when the lawmakers are puppets, the masters can pull whichever strings
they like to accomplish their goals. That includes nullifying old laws that
don't fit the agenda, creating new laws that do fit, and the next step in their
conquest...creating a new supreme court that will override any laws that
they cannot work around.

In simpler terms, if it isn't legal, they will make it legal.

If all these options are out of the question, they'll do it anyway,
and pick someone to feed to the wolves, while the rest make their getaway.

I think the purpose of this thread is to determine the real reasons for
the dramatic increase in gas prices, rather than the lies we've been fed.

We have been told that there were shortages after Katrina hit, we've been
told that the war is putting strain on the oil industry, and this is why we
have been draining our pockets to get to work every day.

What we have not been told, is that these are lies, and they're raking in
record profits based on these bulls**t lines they feed us

benign

legality is such a pathetic concept these days.

when the lawmakers are puppets, the masters can pull whichever strings
they like to accomplish their goals.

True and in that sense everything they wanted to do have been made 'legal' ages ago so why bother trying to catch them doing something illegal? It's the message i thought i was sending.

That includes nullifying old laws that
don't fit the agenda, creating new laws that do fit, and the next step in their
conquest...creating a new supreme court that will override any laws that
they cannot work around.

In simpler terms, if it isn't legal, they will make it legal.

And since they have had so much time i reckon they have had the law on their side for a very long time... Laws are after all enacted to keep the rich rich and make the poor poorer.....

If all these options are out of the question, they'll do it anyway,
and pick someone to feed to the wolves, while the rest make their getaway.

I think the purpose of this thread is to determine the real reasons for
the dramatic increase in gas prices, rather than the lies we've been fed.

Well do they really need a reason when it's legal to raise prises as much as they want? The only thing they are scared of to some extent is public opinion so all they need to do is create the perception in the public mind that there is a logical reason for price increases.... Every disaster and mishap in the world can serve as just another 'logical' reason to hike prices while the poor sap in the street can't change channel without hearing how hard the oil execs have it with all these disasters affecting their business..... That is why i said i do not really understand the intent of the thread and looking back that was probably abit harsh as putting the links together must have taken a nice chunk of time and i always appreciate research!

We have been told that there were shortages after Katrina hit, we've been
told that the war is putting strain on the oil industry, and this is why we
have been draining our pockets to get to work every day.

There was a shortage after Katrina hit but did it in fact have anything to do with the hurricane or was the weather just an excuse to manipulate the market? Well the US went to Iraq to get Iraq oil mostly OFF the market much like they did when they set Kuwaiti oil wells alight after the gulf war....

What we have not been told, is that these are lies, and they're raking in
record profits based on these bulls**t lines they feed us.

Well it would be silly to tell people your cheating them out of their hard earner money.

Anyways!

Stellar

Can the oil companies be linked to the arms that are sold worldwide? HMMMMMM. There is no law against who they want to invest their profits into ( the oil companies ) They are outsourcing their research and development- arent' they? Like the Atlantic Arctic passasgeway opening up due to global warming?

I think the arms dealers are raking in the dough-(and hold another monopoly card in the world trade NWO) although their contracts are not always entirely visible. They may be linked to several illegal operations if they are ever ' caught' Who could prosecute them would be an interesting debate.

Oil companies, Plastics, fertilizers, all must be inter-related somehow, as all of the byproducts must also be utilized if the oil companies are to make profits. Is only gasoline - sold to stations country-wide in the US and worldwide used to make these profit calculations? Or are the byproducts also included?

We get most of our Oil from the following top five countries:
1.) Canada
2.) Mexico
3.) Saudi Arabia
4.) Venezuela
5.) Nigeria

We aren't at war with neither of them so what explains the dramatic increase in the cost of oil? I think they are just using it as an excuse to raise prices to rape the American people for billions of dollars. Out of the top 15 countries we are only at war wih Iraq at number 6 and we get more than double the amount of oil from Nigeria than we get from Iraq.

www.eia.doe.gov...

[edit on 14-3-2006 by NinjaCodeMonkey]

Canada is number one on that list? Kind of blows the whole "no war for oil" theory right out of the water (unless we're at war with Canada now? ). But in turn it raises the question of who exactly is manipulating the prices and why, since the war is obviously not interfering with oil flow from any of our top suppliers.

Any ideas on who's doing the manipulation and why?

Originally posted by makeitso
Yup, they took in a chunk of change all right. The net income for the third quarter is listed as $9.92 billion all right.

According to this Washington Post article, that 9.92 billion profit earned by Exxon Mobil Corp. constituted a profit margin of only 10%. The article goes on to mention:

"People who are freaking out about Exxon's record profit are the same people who were freaking out about AOL Time Warner's record losses" of $98.2 billion in 2002, he said. "One quarter's net income or loss doesn't mean anything."

But the most significant mention is this:

For instance, in 2004 Exxon Mobil earned more money -- $25.33 billion -- than any other company on the Fortune 500 list of largest corporations. But by another measure of profitability, gross profit margin, it ranked No. 127.
Oil Industry Seeks to Cast Huge Profits as No Big Deal

#127 for profitability?!
Hello?!
Can someone send a message to President Bush, Senator Levin's, Senator Frist, Specter, and others that they need to investigate a 126 companies before they get remotely close to Exxon or whomever else they plan to investigate, maybe?!

Personally, I do believe that the oil companies are spiking prices, etc. but I do believe that when the investigations start, they should only reveal the true culprit of the oil and gas problems: a seriously ridiculous U.S. energy policy that, for all intents and purposes, virtually and practically guarantees and exposes a U.S. that is inherently at risk of continued market manipulation and foreign extortion. Yep, thats right, the problem is not simply greedy oil companies, but the government and its energy policies, past and present. To be more truthful and blunt, you can throw blame at the environmentalists that continue to prevent the building of more refineries or drilling offshore or drilling in ANWAR. Consider this, if the U.S. would start producing its own crude oil (from offshore and ANWAR, etc), I would be willing to bet a considerable amount of money that the global oil prices would start dropping, considerably and near-quickly, due to the increased worldwide supply and drop in demand, especially since the U.S. would not need to import so much of that easily manipulated and extorted foreign oil.

In short, yes, indeed, lets have an investigation, but in having that investigation, lets go beyond oil company profit margins, lets investigate the bankruptcy of the U.S. ENERGY POLICY, past and present, that has seriously handicapped all of us living in the U.S. that continues to force all of us to rely on inherently unstable sources of crude oil and gasoline to meet our energy needs!

I understand that this is a conspiracy site, but let's not completely fool ourselves here; let's be realistic and start demanding that the government, from or state representatives to Senators to the President, propose, find, and enact rational and competent methods of meeting our energy needs. Till we start making those demands, this upcoming investigation, along with our continued reliance on the prevailing U.S. energy policy, will amount to one pissing into a hurricane wind.






seekerof

[edit on 25-4-2006 by Seekerof]

What the government should be doing if the present administration care so much about the American hard working class, is to take away the incentives and tax payer money use for these oil companies.

And use it to alleviate us the littler people.

That will put pressure on the oil companies rather than been rewarded for their business practices.

For lack of worthy competition, Seekerof,f i guess it would be unfair not to give you one.

"You have voted Seekerof for the Way Above Top Secret award. You have two more votes this month."

Stellar

Originally posted by Seekerof
In short, yes, indeed, lets have an investigation, but in having that investigation, lets go beyond oil company profit margins, lets investigate the bankruptcy of the U.S. ENERGY POLICY, past and present, that has seriously handicapped all of us living in the U.S. that continues to force all of us to rely on inherently unstable sources of crude oil and gasoline to meet our energy needs!

Seekerof, I am in a complete agreement with your entire post. I wish to point out that one major and very significant US energy policy that led to this current dire conditions associated with oil/gas dependence crisis: The Carter Doctrine.

In addition to the Reagan Corollary to the Carter Doctrine (simply reinforcing the US geopolitical and military position on foreign oil, geopolitical stability in the Middle East and a direct warning to the Soviet Union and China), this US energy policy have evolved, over the years, to strengthen the USA's global supremacy but at the same time weakened the US gradually and exposed its geopolitical vulnerability to stronger foreign factors building up consensus and challenges against the United States' global supremacy.

People tends to focus on oil companies' "greed" as the marked problem of instability on the domestic front (negative public reaction and perception toward "outrageous" profits) but they totally ignored the real culprit: the US energy policy set forth from the Carter Doctrine by an administration that was nearly filled with Trilateralists.


Good post, seekerof.

Anyone who want to punish a company that has a 9% profit margin is a Marxist.

The oil industry is making tons of money because oil is scare, and demand is high.

I dont see the big deal, business are in money to make money. If you don't like it, the only to do is not buy oil products.

Besides, after the whole Enron thing Congress passed a law saying that the management element of US based publically traded companies are legally obligated to MAXIMIZE company profit within the realm of what is legal. This basically means that if the oil companies don't charge as much as they can for their product, their shareholders can sue them.

As far as profiting goes, the profits we are seeing them reap now are the result of structures and programs they implimented back in the 90s, but most importantly the increasing asian market for oil. As long as China keeps needing oil, its going to cost more and more.

Originally posted by Nygdan
The oil industry is making tons of money because oil is scare, and demand is high.

There is enough oil coming out of the ground each day to fill all normal demand and it's hardly fair to assume scarcity because the US was filling it's strategic by back channels to mess up the supply/demand chain. Oil prices have ( and for a very long time ) very little to do with fundamental supply and demand questions and these days it's just a 'fear' premium we are all paying while the US government uses the additional income from fuel prices instead of raising general taxes. Can you think of a better way to tax the individual while avoiding taxes on industry?

Everyone knew the Federal Reserve would have to increase interest rates sooner or later. But the surge in oil prices seems to have come as a bolt out of the blue: No one predicted it. Even as oil prices rose from under $30 per barrel, where they were just one year ago, to $40, then $50, Wall Street analysts saw the rise as a spot phenomenon, nothing really to worry about.

But today crude is selling for $55 per barrel on the New York Mercantile Exchange. The price rise has just started to hit consumers in the form of higher gas prices. On Friday, Greenspan added his voice to the chorus, noting oil prices adjusted for inflation were still not as high as they were in the early 1980s and that, no, the world is not "running out of oil."

The chairman concluded: "So far this year, the rise in the value of imported oil--essentially a tax on U.S. residents--has amounted to about three-quarters of one percent of gross domestic product. The effects were far larger in the crises of the 1970s. But, obviously, the risk of more serious negative consequences would intensify if oil prices were to move materially higher."

www.forbes.com...

Not that i consider mister Greenspan all that but there it is.

Stellar