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Exxon Mobil breaks record with $14.8 billion profit Giant's string of blockbuster earnings all but certain to end with latest quarter By Steve Gelsi, MarketWatch Last update: 9:41 a.m. EDT Oct. 30, 2008NEW YORK (MarketWatch) -- Exxon Mobil Corp.'s third-quarter net income rose 58% to a new record of nearly $15 billion, the energy giant said Thursday, in a likely swan song for groundbreaking profits tied to this past summer's triple-digit prices for crude oil. Exxon added that total production fell 8% and warned that its fourth-quarter earning would be cut by about $500 million because of repairs and lower volumes. Shares of the oil giant fell 1.3% to $73.66. Exxon Mobil (XOMexxon mobil corp com News, chart, profile, more
XOM) said it earned $14.83 billion, or $2.86 a share, up from $9.41 billion, or $1.70 a share in the year-ago period. Excluding items, earnings generated by the Irving, Texas oil producer and refiner rose 42% to $13.38 billion, or $2.59 a share, for the latest quarter. Quarterly revenue jumped to $137.74 billion from the prior year's $102.34 billion. Analysts had been expecting earnings of $2.38 a share, according to the consensus derived in a survey by FactSet Research. Oil prices peaked at the record level of $147 a barrel in the early days of the third quarter and started falling, down to $96 a barrel on Sept. 29 and a brief visit back to $100 to close out the period the next day. In recent weeks, oil has fallen to the $65-a-barrel level, effectively signaling an end to record profits for Exxon Mobil and other oil giants. Still, the lower oil levels will help reduce some expenses. Meanwhile, average gasoline prices have fallen to $2.55 a gallon this week, down from more than $4 a gallon over the summer. Crude's retreat has accelerated to below $70 a barrel since the end of the third quarter, roiling shares in the energy sector and signaling lower profits from oil production in the fourth quarter. Investors brutally dumped energy stocks in recent weeks, partly on jitters about dwindling demand and the fact that stocks in oil and natural-gas producers had further to fall, since they'd been outperforming the broad market until the late summer. On the plus side, lower oil prices help boost refining margins, while a drilling slowdown in the oil-services sector could also ease the cost of getting precious crude out of the ground. Also Thursday, Exxon Mobil reiterated its target for 2008 capital and exploration spending of $25 billion. In the second quarter, Exxon Mobil's net income climbed to $11.68 billion -- beating its own record of $11.66 billion in the fourth quarter of 2007, although the mark fell short of Wall Street estimates. Still, the company racked up what until Thursday ranked as the richest-ever quarter reported by a private corporation. See full story. Steve Gelsi is a reporter for MarketWatch in New York.
-------------------- It is impossible to make anything foolproof because fools are so ingenious. Posts: 3311 | From: St. Louis | Registered: Feb 2005
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posted
Yeah...regardless of if folks agree with it or not I think you are right. One is coming. Oil co.'s are likely looking at the possibility of losing a lot of undeveloped leases as well.
-------------------- No longer eligible for government service due to lack of tax issues. Posts: 5178 | From: Up North | Registered: Dec 2005
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Well your first instinct would be that there profit would go down along with their stock... but I remember the first company to take over General Electric as the largest company. IT was Exxon and that was over ten years ago... still there.
Posts: 208 | Registered: Sep 2008
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quote:Originally posted by Rockster: Well your first instinct would be that there profit would go down along with their stock... but I remember the first company to take over General Electric as the largest company. IT was Exxon and that was over ten years ago... still there.
Actually, speaking of largest company. Per an article I read a couple days ago, Volkswagen is now the worlds largest company after a recent investment by Porcshe SE. They overtook Exxon. If I can find the link I'll post it.
-------------------- It is impossible to make anything foolproof because fools are so ingenious. Posts: 3311 | From: St. Louis | Registered: Feb 2005
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posted
I wonder how much money exxon wants from the tax payers after all they should have made more than 14.8 billion,poor little guys.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
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hate to burst bubbles, but: PERKS FOR EXXON FROM THE 2005 ENERGY BILL Deepwater Drilling. ExxonMobil is the self-declared leader in deepwater oil and gas, which it claims will account for 20 percent or more of its production by 2010. The Energy Bill dolled out $1.5 billion in oil subsidies for ultra-deepwater activities. Tax Royalty Relief. Oil companies supposedly pay a royalty to the government for the privilege of extracting resources off public land owned by all Americans. The Energy Bill dolled out billions worth of unnecessary “royalty relief” for ExxonMobil and other oil and gas companies. Ironically, Exxon has already settled several lawsuits for $52 million for not paying or underpaying royalties. In Alabama Exxon was found guilty of royalty fraud and fined $3.6 billion, which the company has appealed since 2000.
this project is still not built:
Exxon warns it will shelve Mackenzie pipe without subsidy
Posted May 31, 2007 in [Energy]
Oil giant says project isn't viable without federal assistance
Shawn McCarthy, May 31, 2007, Globe and Mail - Exxon-Mobil Corp., one of the world's biggest oil companies, has turned up the heat on the Canadian government, saying the company will shelve the long-delayed Mackenzie Valley pipeline project unless it can get significant taxpayers' assistance for it.
Rex Tillerson, Exxon's chief executive officer, told reporters at the company's annual meeting in Dallas yesterday that the $16.2-billion price tag for the 1,200-kilometre natural gas pipeline means that it is not viable without sizable federal aid. The pipeline would carry up to 1.9 billion cubic feet a day of natural gas from the Canadian Arctic to Alberta, and is seen as a critical piece of infrastructure in opening the North to resource development.
Exxon owns 69.6 per cent of Imperial Oil Ltd. [IMO-T] of Calgary, which is leading the project, currently under review by the National Energy Board.
Earlier this year, Imperial announced that the projected cost for the Mackenzie Valley pipeline had ballooned to $16.2-billion from $7.5-billion, and that the partners would require "an appropriate fiscal framework" from the government to allow it to go ahead.
Exxon is also one of the largest employers of registered lobbyists...
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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From 2003 to 2007, Exxon's earnings grew by 89%, while income taxes grew by 170%. Much of that growth was overseas. Oil-producing countries charge companies like Exxon dearly to dig for oil. Arrangements vary from country to country, but Russia and Libya charge companies up to 90% of the revenues they collect for extracting oil, according to Fadel Gheit, senior analyst for Oppenheimer (OPY). These arrangements—whether production share agreements or royalty contracts—are not disclosed by companies and governments.
In tax terms, the U.S. government is kinder to oil companies. According to Securities & Exchange Commission filings, Exxon paid an effective tax rate of 34% to the U.S. government in 2007, or $5.12 billion. While cheaper than rates from some foreign governments, it's still a higher rate than many U.S. companies pay. A BusinessWeek collaboration with Capital IQ in December, 2007, found that the average percentage of earnings spent on taxes by companies that make up the Standard & Poor's 500-stock index was 26%, well under the 35% official U.S. corporate income-tax rate. Companies achieved lower taxes in a variety of ways, from taking advantage of lower tax rates abroad to benefiting from industry-specific breaks.
Exxon's critics point out that its stated tax rate doesn't reflect a number of deductions and tax breaks that are afforded the oil and gas industry in the U.S. Erich Pica, a spokesman for the environmental group Friends of the Earth, says the U.S. federal tax code contains more than $17 billion in breaks to benefit the oil and gas industry for fiscal years 2007-11.
That $17 billion is made up mainly of tax breaks newly offered or extended in the Energy Policy Act of 2005, including a "percentage depletion allowance" that allows oil companies to deduct 15% of their sales revenue, to reflect the declining value of their investment, and 70% of their drilling costs.
Additionally, oil and gas companies pay reduced royalty fees on products they recover from federally owned waters, which Pica says could cost taxpayers $65 billion over five years.
hmmmmmm... really odd:
The debate over whether Big Oil pays too much or too little is taking place alongside a battle for government resources between conventional and renewable energies. When Congress passed the 2007 energy bill in December, it kept tax credits for oil and gas companies while allowing those for wind and solar power to expire this year. Democrats, including House Speaker Nancy Pelosi (Calif.), are now pushing for the Renewable Energy & Energy Conservation Tax Act (HR 5351), which would repeal $18 billion in tax subsidies for large oil and gas companies.
Here, there's little surprise: Exxon opposes the legislation, while environmental groups are backing it.
in the end? we all pay these taxes as we use the oil...
Exxon adjusts the prices accordingly.....
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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quote:Originally posted by Rockster: Well your first instinct would be that there profit would go down along with their stock... but I remember the first company to take over General Electric as the largest company. IT was Exxon and that was over ten years ago... still there.
Actually, speaking of largest company. Per an article I read a couple days ago, Volkswagen is now the worlds largest company after a recent investment by Porcshe SE. They overtook Exxon. If I can find the link I'll post it.
Not largest but most valuable... there is a difference between largest and most valuable...
-------------------- Let the world change you... And you can change the world.
Ernesto "Che" Guevara de la Serna Posts: 4669 | Registered: Mar 2004
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posted
25%-30% (not 35-40%) seems to be about what i have seen on publicly disclosed tax returns for the wealthy...
the Cheneys?
The White House also released the 2005 tax return filed by the Cheneys. They reported adjusted gross income of nearly $8.82 million, which was largely the result of exercising stock options that had been set aside in 2001 for charity.
According to the return, they have overpaid their taxes this year and are entitled to a refund of about $1.9 million.
The Cheneys donated just under $6.87 million to charity from the stock options and royalties from Mrs. Cheney’s books. That left about $1.9 million in income on which the Cheney’s owed $529,636 in taxes.
In 2004, the president and first lady Laura Bush reported $784,219 in adjusted gross income and paid $207,307 in federal income taxes.
April 18 (Bloomberg) -- John McCain, who has clinched the Republican presidential nomination, reported $405,409 in income last year and paid $118,660 in federal taxes, according to tax returns made public today.
WASHINGTON — Republican presidential candidate John McCain's wife, Cindy, reported $4.2 million in income for 2007, nearly $2 million less than she reported the previous year, according to tax returns released by the McCain campaign Friday. Mrs. McCain, who files her taxes separately from her husband, paid $1.1 million in taxes, a tax rate of about 26 percent. She reported nearly $530,000 in itemized deductions.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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quote:Originally posted by Rockster: Well your first instinct would be that there profit would go down along with their stock... but I remember the first company to take over General Electric as the largest company. IT was Exxon and that was over ten years ago... still there.
Actually, speaking of largest company. Per an article I read a couple days ago, Volkswagen is now the worlds largest company after a recent investment by Porcshe SE. They overtook Exxon. If I can find the link I'll post it.
Not largest but most valuable... there is a difference between largest and most valuable...
Your absolutely correct. Poor choice of words on my part.
-------------------- It is impossible to make anything foolproof because fools are so ingenious. Posts: 3311 | From: St. Louis | Registered: Feb 2005
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