Mobil $10BILLION Profit !!!!!!

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NEW YORK (July 27) - Exxon Mobil Corp., the world's largest public oil company, on Thursday reported quarterly profit surged 35 percent to more than $10 billion, driven by yet another quarter of sharply higher oil prices.

The results sailed past Wall Street forecasts and sent its shares to an all-time high, but quickly triggered a fresh wave of outrage from U.S. lawmakers and consumer groups angry at Big Oil's profiting handsomely while gasoline prices soar.

"While American families get tipped upside down and have their savings shaken out of their pockets at the gas pump, the Bush-Cheney team devises even more ways to line Big Oil's pockets," Rep. Ed Markey, a Massachusetts Democrat, said in a statement on Exxon's profits. He is a member of the U.S. House of Representatives Energy and Commerce Committee.

In a surprise move, Exxon -- notorious for rarely changing its plans no matter how high oil prices are -- boosted its capital spending forecast for the year to $20 billion, citing fresh exploration and production opportunities.

The company, the world's largest by market capitalization, also said it planned to increase its already hefty stock buyback program to $7 billion in the third quarter to make use of its ballooning hoard of cash.




Soaring prices, stronger refining margins and higher oil and gas production all combined to boost Exxon's second-quarter earnings to $10.36 billion, or $1.72 a share.

That is up from $7.64 billion, or $1.20 a share a year earlier, and above the average Wall Street forecast of $1.64 a share, according to Reuters Estimates.

Revenue jumped 12 percent to $99.03 billion, from $88.57 billion a year earlier but below the Reuters Estimates' forecast of $104.26 billion.

Exxon shares rose more than 1 percent, or 90 cents, to $67.45 on the New York Stock Exchange in morning trade after touching an all-time high of $67.65 a share earlier in the day.

"They're just benefiting from a strong commodity cycle and doing a very good job of it," said Lysle Brinker, analyst with energy research firm John S. Herold. "But they don't operate in a vacuum and they realize that. They're going to get tons of spears and blow darts from political and consumer groups."

Bumper Quarter ... Again

Exxon, like its peers, enjoyed another in a string of bumper quarters as crude oil prices hovered at historic highs. Oil prices, on a steady rise in recent years because of growing Asian demand and fears of supply disruptions, hit a record high of $78.40 a barrel two weeks ago on anxiety over Middle East supplies.





Exxon's oil and gas production jumped 6 percent, on higher volumes in West Africa and Qatar and partly offset by maturing fields. Excluding divestments and production-sharing contracts affected by high oil prices, total production grew 9 percent.

That output growth and a strong performance overall at Exxon's exploration and production unit helped the company surpass analyst expectations, Credit Suisse analyst Mark Flannery said in a research note.

The company's new capital spending forecast of $20 billion this year is up from a previous estimate of between $18 billion and $20 billion. It did not specify what new opportunities it planned to pump the additional money into, and analysts speculated that part of the increase may be the result of rising costs sweeping across the industry.


07-27-06 10:38 EDT

[JPFS1]

They're a company that spends billions on exploration and development of a dwindling resource that the world is dependant on and they are making shyte loads for doing so.... So what????

The oil producing companies do not price the oil....!!!

How many threads are going to be dedicated to bashing the oil price and producing energy companies without actually knowing why the oil price is up where it is??

Give you a hint.... Hedge funds.

[kyro_02]

k, lets see the people who like high petrol prices complain when they, themselves cannot cope with $5 a litre haha

the stooges who suck the oil out are getting plenty the greeds !! they say oil will run out in 10-20 years time yet other sources are saying there is **** load of oil they can digg else where ! though then comes in the 'costs too much to build another oil rig, outweighs the chance of profit anytime in the future .

[HTCURRY]

The per dollar profit line in the oil industry is actually a lot lower than most other industries and businesses. Their product is in demand atm...and business is good, so whats the problem? No matter what the oil companies do people will complain. I bet when petrol was 90 cents a litre people complained that back in the day it was 50 cents...

this is what we as human being do best...COMPLAIN.

EDIT: surfed the net and got some numbers to back up my assertion

Altria group(marlboro and other brands) makes 22 cents profit on every dollar.

Merck(massive pharmaceutical) makes 25.3 cents profit on every dollar.

Exxon Mobil makes 8.2 cents profit on every dollar.

So whos worse?

the 1st company is making a product that is making australians sick and costing the govt a lot of money.

the 2nd company is coming up with cures for the evils of the 1st company, but again in the process screwing the govt. ie the tax payer.

So u say well i can do without smokes..its a personal choice...well make a personal choice to drive a car this more frugal on fuel. Sure it wont solve all the problems..but it will make things better.

BTW. I was born in Kuwait and my opinions might be biased....heheheheh

[parawolf]

*shrugs* Either get a more fuel efficent car, get public transport, get on a push bike, or invest in these publicly traded companies and make some cash out of the situation.

But for heavens sake, don't carry on about it time and time again.

[Dazza XLT]

They're a company. They are in the business of making money for shareholders, not losing it. :
If their profit increased 35%, thats good. The demand for their products is huge worldwide, one would expect it to increase, rather than decrease.
Thats just the way it is!

[AUIIIXR8]

The difference is that almost every family in the country spends $40-140 a week on fuel where smokes and pharmaceuticals are a lower spend product. That and we need fuel as apposed to needing smokes!

So a profit of 8.2c per dollar is huge. This profit is of course after they pay everyone and invest in resources so the actual revinue VS actual manufacturing cost is much higher again.

[xbgs351]

So did you buy some of their shares?

[VSSII]

What are their overheads? Pump the sludge out of the ground, put in a fractional distillation machine and whammo.

[ltd]

In comparison to other businesses, oil companies (those that distille, have some of their own fields and refine), have made profit margins that are still very low, lower than 20%. Whilst this sounds fine, most companies make over 50% on the products they sell. Furthermore, most companies whack an extra 50% on top of what they paid just so they can sell it to you. Petroleum is a low profit, high volume product that still is lower in profit percentage than just about any other product on the market. Mitsubishi for example make more than 17% on their costs with the 380.
Due to the huge amounts of investment required in searching, drilling, capital equipment, land etc tied up in oil, companies like exxon tend to have assets and liabilities in the tens of billions of dollars. Companies like Shell, Exxon, British Petroleum, Caltex (texaco) etc all made larger profits in the last few financial years.

As oil is a commodity, the prices are set by cartels like OPEC who limit/increase supply to achieve a net price agreed on per barrel. Demand is set by the market; what people are prepared to pay per barrel - in unison with traders that use hedge funds which artificially rally prices.

In the very late 90's and for 6 months of 2000 oil was approximately between $10-15 US per barrel. Now it sits around the $75.00 US per barrel, and has been rallied up to $78.45 US a barrel. Since the low price of 1999 until 2006, several factors have emerged that has made the price for crude oil go up substantially.

1/ China emerged as the big new economic superpower. With a population over 1.1 billion people and democracy creeping its way into china, millions have decided almost overnight that they need energy and want to use oil to create products like fuels, plastics, parafins etc. This has substantially increased demand for oil.

2/ India has become another emerging industrial powerhouse, and all of a sudden millions in India want energy derived from crude oil. This has only increased demand.

3/ The middle east has stumbled through crisis after crisis, countries represented by OPEC and having a casting vote became the big winners financially for such tensions in the area. OPEC are skittish whenever someone in the middle east has flatulence and as such constantly threaten to reduce supply. Bear in mind that these companies now have similar sales in terms of units however their revenues have increased by over a whopping 600% in the last six years. Countries like Saudi Arabia; being the largest oil producer in the world, have remarkably not benefitted, as the oil fields and all the revenues thereof belong to the Royal Family. Poverty is actually quite high in Saudi Arabia.

Anyway, I digress. OPEC now does not officially tell the world about its meetings like it did in 2000, 2001, 2002 and parts of 2003. The middle eastern countries love the higher prices and the higher revenues generated for the same product. Some countries like Saudi Arabia have likened the high price as waging a jihad on the west, as it tries to topple western democracies and governments - but that's another story.

What hasn't been accounted for is the higher demand on alternative fuels. Whilst the middle east has been greedy for larger profits (often used to buy arms), pressure has increased steadily to cut the umbilical cord to the middle east and tell them where to stick their oil. When that happens, these countries will have nothing to trade with except perhaps refugees which of course, great organisations like the UN will tell australia that we should take more than 25% of, and other countries like norway that take no refugees will vote that Oz has an obligation.

Billions of dollars have been poured into researching a faster amortised alternative fuel, as the west seeks to insulate itself from massive inflative pressures that can topple an economy. It's only a matter of time before an alternative is found and commercially viable; then we can tell OPEC to **** our ******* those ****** ******* mother ****** ****** ball ***** ****** monkey ***** *********** wheel barrow ******* pokie headed ****************!

[Bucket]

Originally Posted by VSSII

What are their overheads? Pump the sludge out of the ground, put in a fractional distillation machine and whammo.

And pay for a company like the one i work for to find the sludge..make sure its actually good quality....set up the well and drill and the people to maintain the operation of it etc etc.

And if its a Rig...well add more to the above

There is a little bit more to it then just pumping it out of the ground...


As for the rising price of oil/the need to find alternative fuel....

CNG is looking like an awesome option...10 Trillion Metric tonnes of the stuff has been discovered in a massive underground resevoir off the north coast of WA/NT

[jim1606]

surley it is only fair, oil prices are rising (as are gas prices) yet when british gas post record profits people dont complain. if people dont like the fact oil companies are making so much money then buy a bike or walk!

[Walkinshaw]

Originally Posted by Bucket

And pay for a company like the one i work for

Contractor for Woodside?