Exxon/Mobil Record Profits.

Discussion in 'The Back Room' started by Terry O'Keefe, Jan 30, 2006.

  1. Terry O'Keefe

    Terry O'Keefe Well-Known Member Administrator

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    I certainly expect a firestorm, again over this. Sometime I wonder if people think that Exxon/Mobils entire profit comes from the margin on the sale of gasoline. They are a very diverse company, who is also fully integrated from the finding of the oil, to the selling it to you. Amongst many other things.

    I know those who think the price of gas, being a commodity that for the most part we can't controll our use as much as we can other consumer items, should be regulated or that the oil companies profits should be regulated will be howling at the moon over this.

    Also those who will be upset with this will not be upset with other company's whose profit margins are even greater, much greater. I saw a comment by a poster on another board that Exxon/Mobil is the anti-GM.

    It's Bushes fault!

    Terry
     
  2. Terry O'Keefe

    Terry O'Keefe Well-Known Member Administrator

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    From another board.
     
  3. Motorcity Gator

    Motorcity Gator Well-Known Member

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    :shock:

    I don't have to buy a GM. I have to buy gas and there is no alternative to any extent.
     
  4. HoustonLarry

    HoustonLarry New Member

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    Good for Exxon....

    <t>Makes my day.</t>
     
  5. Terry O'Keefe

    Terry O'Keefe Well-Known Member Administrator

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    I think that's why it's a politically sensitive issue. The avg consumer, if the price of Cars or Housing is high, has options to control their costs. They can continue to drive the old car, live in the old house or buy newer at the lower end of the market.

    But while I am somewhat insulated personally from the high cost of gas by the fact I live close to the office and don't have multiple cars and/or teenagers, still it eventually hits me with the increasing cost of things like shipping, etc.

    The question is would we be seeing hybrid autos if gas were 1.30 gal? I doubt it, there would be little incentive. I doubt if we would be seeing research into other alternatives either.

    I do know one thing, in Houston at least, we are reaching the upper end of what can be done with freeways and freeway expansion. This country desperately needs to get with it in terms of public transportation. It's not possible when everybody can afford to drive a car to work or play. So higher gas prices will in the long run probably improve public transportation, stimulate R&D in alternative fuels, etc.

    Terry
     
  6. BuckeyeT

    BuckeyeT Well-Known Member

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    :?:

    MCG, you may have to buy gas, but you do not have to buy it from Exxon. If you don't like them, there are many alternatives....many are non-US companies. Exxon has no more to do with the price of oil than GM does the price of steel.

    Terry
     
  7. Terry O'Keefe

    Terry O'Keefe Well-Known Member Administrator

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    BuckeyeT

    ExxonMobil reported 37B earnings on sales of 367B, now my math says that's a 10% return. I assume in the corporate world that simple math holds up, right?

    If so how much of that is due to the increases in the Price of Gas, ie if gasoline prices were such that Exxon/Mobil made 1% (surely they are entitled to 1%) on the sales of gas. How badly would that have hurt their earnings (they do have fingers in things other than gasoline)? I get the feeling that most who are outraged at them having record earnings assume that the entire amount is the profit on gasoline sales.

    Also, if one assumes that 10% profit is not some unconscineable amount of profit (BTW my Dental Practice couldn't run on 10% profit margin). Then as people buy more of your products then even if that 10% stays the same there will be more record profits.

    Terry
     
  8. BuckeyeT

    BuckeyeT Well-Known Member

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    TOK,

    simple math works most everywhere with the notable exception of political theater. Far from unconscionable, Exxon's 10% margin is below the average for the S&P500. And as I've said on many previous occasions, Exxon's profit margin is well below the major energy companies domiciled in China(!), Argentina, Brazil, France(!), Italy, Canada and Austria....indeed, the profit margins for the two large Chinese companies are more than triple those at Exxon.

    Political theater rarely makes for solid policy. The Exxon profits issue is all theatrics....attempting political gain on the assumption of an uninformed, ignorant electorate is the strategy of a ideologically bankrupt party. Good old Honest Abe said it best a long time ago, "You can fool some of the people......"

    Terry
     
  9. whobedis

    whobedis New Member

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    "Look who's smiling now!" :D In the last 18 months my NS stock has more then doubled. To think Candy was ready to leave me when I took a flyer on 2000 shares at 16. Almost all due to the run-up in gas. Then again roundtrip to work is 6 miles for me and 8 for Candy
    "Greed is good!"
    Gordon Gecko
     
  10. whobedis

    whobedis New Member

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    8) BT...GM does have part in the price of steel due to consumption (you knew that I know,but it allows me to mention)....the huge run-up in scrap steel....Hell they are even stealing the man hole covers down in Indy to sell and.....coming this May...."THE WORLDS LARGEST CAR SHREADER" IN ELKHART INDIANIA (that mother is big)
     
  11. Terry O'Keefe

    Terry O'Keefe Well-Known Member Administrator

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    Will the Shredder be next to the RV Hall of Fame? :)
     
  12. whobedis

    whobedis New Member

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    :D Terry,
    They are moving the Hall of Fame.....but until they do it is one block over from "Big Momma". ( I found that ironic myself) :)
     
  13. whobedis

    whobedis New Member

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    8) Ahead of schedule "Big Momma" was fired up today.....seems the neighbors were complaining about the rising stacks of crushed cars.
     
  14. Motorcity Gator

    Motorcity Gator Well-Known Member

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    Does it matter if I buy gas from Exxon vs. another gas provider when all prices are so closely held together?

    What choices do I have on heating fuel for my home?

    Like Terry says I don't have to buy a new car. I can drive my old one 200,000 miles and then buy a used car to replace it. I have a choice.

    I do not have any viable choice when it comes to gasoline for that car.
    I have to pay the going rate no matter how high it gets and there are very, very few monopolies like this in America anymore where the consumer is held hostage by a critical need industry. Think AT&T, airlines and the trucking industry for those consumer industries forced to deregulate and become more competitive and less monopolistic and price gouging.

    With regard to the 10% margin.....36 billion in yearly profit is 36 billion no matter how you slice it.

    Should that profit be privately held and the American public just keep dishing out the high payments for gas? Would the conservatives on this board feel he same way if gas prices went to $6.00 per gallon and the economy went in the toilet as a result and Exxon's profits were at the same time over 100 billion for one year?

    http://www.consumerwatchdog.org/energy/pr/?postId=5806&pageTitle=FTCR+Expert+Testifies+Before+U.S.+Senate+That+Standard+Oil+Trust+Has+Been+Resurrected%2C+New+Anti-Trust+Laws+Needed
     
  15. Motorcity Gator

    Motorcity Gator Well-Known Member

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    I want to reiterate a stance that I have long held....ever since the takeover/acquisition craze in the 80s ruined many companies and the lives of the hard working Americans that worked for some of those companies.

    It is dead wrong for American government to allow a very few individuals to gain enormous wealth at the expense of thousands not in a position to defend their position. It is not in the ethical creation of our Constitution to provide mechanisms for highway robbery of innocent Americans under the guise of free capitalism and democracy.

    Somehow the message of freedom for the people has been misconstrued as freedom to gain astronomical individual wealth in any way that you possibly can as long as you don't get caught doing something officially illegal even it means thousands of others losing their jobs or having to pay outrageous amounts of money for critical need services.
     
  16. JO'Co

    JO'Co Well-Known Member

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    :wink:
    I'm rooting for Exxon. They're not part of the rich, liberal, elite who control the media, universities and school systems. They're owned directly by the American people as one of the main components of mutual funds which prop up and support the retirement programs and personal nest eggs of workers both public and private. If Exxon weren't doing well, it would be a disaster for every common person and worker in this state, who're counting on its consistently outstanding performance to continue. Anyone who has a 401k or 403b Plan owns Exxon stock.

    ...............JO'Co
     
  17. Motorcity Gator

    Motorcity Gator Well-Known Member

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    Yeah Jo'Co and since Mar. 2000 my 401-K has not seen the kind of gains that will fund my retirement. Sure the last 2.5 years or so have been very strong but prior to that going back to March 2000 my 401-K was devastated like most people.

    What is the net gain in six years? Are you saying that Exxon is solely responsible for my 401-K's well being? That as Exxon goes so goes my retirement? Really?

    Geez if that's the case I hope the price of gas goes to $8.00 per gallon and Exxon's profits are over 350 billion because I will be a rich man.
     
  18. JO'Co

    JO'Co Well-Known Member

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    No. I said exactly what I did say; not what you wished I'd said. I said,

    "They're owned directly by the American people as one of the main components of mutual funds which prop up and support the retirement programs and personal nest eggs of workers both public and private."

    A lot of Exxon's profits come from non-oil sources of revenue and most of the price of a gallon of gas has nothing to do with any American oil company, but then we've already been over all of that stuff before, so why rehash those old arguments?

    Capitalism works. Socialism doesn't work. Private interests and corporations can be regulated and controlled, but the government, which the lib/Dems look to as their savior, never returns power or gets smaller. Even the current Republican Congress/President has done little to stop its growth and every day it grows more powerful, we lose more freedoms...

    Exxon is just a bit player in the great, government controlled drama...

    ....................JO'Co
     
  19. BuckeyeT

    BuckeyeT Well-Known Member

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    MCG,

    I don't know where to begin...so I won't. If I didn't know better, I'd swear you were spouting Marxist dogma...

    I must have missed that great consolidation craze that was so ruinous to our companies and citizens although I spent scores of sleepless nights and ridiculous hours structuring transactions that enhanced the competitiveness of many fine companies and created significantly better career opportunities for thousands of employees.

    What the Marxists have shown us and provided compelling evidence for all the world to see is that the table of the lowest common denominator cannot provide enough to feed itself......

    Terry
     
  20. Motorcity Gator

    Motorcity Gator Well-Known Member

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    Think the fictional character that Richard Gere played in Pretty Woman as an example of ruthlessness( to be somewhat shallow) but also think Asher B. Edelman as a real life example of those who sought to acquire good profitable companies and bleed them for his own gain.

    Sure, the idea of consolidation is sometimes necessary...like when Toyota and GM merge (only to say Toyota isn't "buying" GM when they really are).

    In the 80s I think it was more a gamesmanship/personal wealth building thing than necessary and prudent business.